Incoterms Rules
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The Importance of the Incoterms® Rules
Incoterms are internationally recognized and harmonized terms that spell out the specific obligations of parties to transactions involving the purchase and sale of goods involving shipment and delivery risks.
Published by the International Chamber of Commerce, the Incoterms rules allow buyers and sellers to transact business with the certainty that each understands:
- The various obligations of the seller and the buyer
- The point at which the risk of loss or damage to the goods passes from the seller to the buyer
- Which party bears the various costs associated with the shipment
- Which party is responsible for insuring the goods
An Introduction to Incoterms
FCA – The seller leaves most things to the buyer
CPT – The seller arranges the main carriage
CIP – The seller arranges cargo insurance for the benefit of the buyer
The D-terms – The buyer leaves most things to the seller
Incoterms that should be approached with caution
Disclaimer: This information is provided as a public service and for discussion of the subject in general. It is not to be construed as legal advice. Readers are urged to seek professional guidance from appropriate parties on all matters mentioned herein.
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