The Incoterms® rules
The Incoterms® rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade.
Below are short descriptions of the 11 rules from the
Incoterms® 2010 edition. These should be read in the context of the full
official text of the rules which can be obtained from the ICC BusinessBookstore
RULES FOR ANY MODE OR MODES OF TRANSPORT
“Ex Works” means that the
seller delivers when it places the goods at the disposal of the buyer at the
seller’s premises or at another named place (i.e.,works, factory, warehouse,
etc.). The seller does not need to load the goods on any collecting vehicle,
nor does it need to clear the goods for export, where such clearance is
applicable.
“Free Carrier” means that the
seller delivers the goods to the carrier or another person nominated by the
buyer at the seller’s premises or another named place. The parties are well
advised to specify as clearly as possible the point within the named place of
delivery, as the risk passes to the buyer at that point. “Carriage Paid To” means that
the seller delivers the goods to the carrier or another person nominated by the
seller at an agreed place (if any such place is agreed between parties) and
that the seller must contract for and pay the costs of carriage necessary to
bring the goods to the named place of destination. - CIP Carriage And Insurance Paid To
“Carriage and Insurance Paid
to” means that the seller delivers the goods to the carrier or another person
nominated by the seller at an agreed place (if any such place is agreed between
parties) and that the seller must contract for an pay the costs of carriage
necessary to bring the goods to the named place of destination.
‘The seller also contracts for insurance cover against the
buyer’s risk of loss of or damage to the goods during the carriage. The
buyer should note that under CIP the seller is required to obtain insurance only
on minimum cover. Should the buyer wish to have more insurance protection, it
will need either to agree as much expressly with the seller or to make its own
extra insurance arrangements.”
- DAT Delivered At Terminal
“Delivered at Terminal” means
that the seller delivers when the goods, once unloaded from the arriving means
of transport, are placed at the disposal of the buyer at a named terminal at
the named port or place of destination. “Terminal” includes a place, whether
covered or not, such as a quay, warehouse, container yard or road, rail or air
cargo terminal. The seller bears all risks involved in bringing the goods to
and unloading them at the terminal at the named port or place of destination. “Delivered at Place” means
that the seller delivers when the goods are placed at the disposal of the buyer
on the arriving means of transport ready for unloading at the named place of
destination. The seller bears all risks involved in bringing the goods to the
named place. “Delivered Duty Paid” means
that the seller delivers the goods when the goods are placed at the disposal of
the buyer, cleared for import on the arriving means of transport ready for
unloading at the named place of destination. The seller bears all the costs and
risks involved in bringing the goods to the place of destination and has an
obligation to clear the goods not only for export but also for import, to pay
any duty for both export and import and to carry out all customs formalities.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
“Free Alongside Ship” means
that the seller delivers when the goods are placed alongside the vessel (e.g.,
on a quay or a barge) nominated by the buyer at the named port of shipment. The
risk of loss of or damage to the goods passes when the goods are alongside the
ship, and the buyer bears all costs from that moment onwards.“Free On Board” means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards. “Cost and Freight” means that the seller delivers the
goods on board the vessel or procures the goods already so delivered. The risk
of loss of or damage to the goods passes when the goods are on board the
vessel. the seller must contract for and pay the costs and freight necessary to
bring the goods to the named port of destination. - CIF Cost, Insurance and Freight
“Cost, Insurance and Freight”
means that the seller delivers the goods on board the vessel or procures the
goods already so delivered. The risk of loss of or damage to the goods passes
when the goods are on board the vessel. The seller must contract for and pay
the costs and freight necessary to bring the goods to the named port of
destination. ‘The seller also contracts for insurance cover against the buyer’s
risk of loss of or damage to the goods during the carriage. The buyer
should note that under CIF the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have more insurance protection, it will
need either to agree as much expressly with the seller or to make its own extra
insurance arrangements.”