Incoterms® or International Commercial Terms are Rules for Sellers and Buyers
Incoterms®, an acronym for International Commercial Terms, are published by the International Chamber of Commerce (ICC), and describe the responsibilities of the seller and buyer in domestic and international trade.
Note: “Incoterms” is a trademark of the International Chamber of Commerce (ICC).“
Incoterms®, perhaps best known by their Three-Letter terms, are accepted globally, and are used in commercial negotiations and contracts to communicate important information about shipped goods.
Incoterms 2010 describe the responsibilities of the seller and buyer in international trade.
Purpose and Scope of Incoterms®
Provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade.
Reduce:-
- Misunderstandings
- Disputes
- Litigation
- Waste of time and money
Incoterms® rules Limited to the rights and obligations of the parties to contract of sale with respect to the delivery of goods sold.
Deals only with:
- relationship between seller and buyer
- only in some very distinct circumstances
Incoterms® rules
- Relate only to contract of sale
- Do not relate to contracts of:
- Carriage
- Insurance
- Financing etc…
- Do, however, have implications for those contracts
Why are Incoterms® Revised?
Incoterms® rules were first created in 1936 by the International Chamber of Commerce (ICC).
To bring the rules in line with current international trading conditions at the time,the ICC have updated and published revisions for the following years:
1953,
1967,
1976,
1980,
1990,
2000,
2010, and currently for
2020.
As you can see, Incoterms® 2020 is the eighth revision, and since 1980, the revisions have occurred every 10 years.
Incorporation of Incoterms into the contract of sale
Merchants wishing to use Incoterms® 2020 should clearly specify that their contract is governed by Incoterms® rule (the relevant term) and (relevant version)
For example: FCA 34 Pinehurst Avenue, Rouse Hill 2155, Sydney, New South Wales, Australia Incoterms® 2020
A Look in Detail at Recent Editions of Incoterms®:
Incoterms® 2020
Incoterms® 2010
Incoterms® 2000
Incoterms® 1990