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Incoterms
What are Incoterms?
Incoterms are ICC Paris regulations. They define delivery conditions between contracting parties for the international trade in goods. They are divided up into 13.
The most recent version, Incoterms 2000, ICC publication no. 560, has been in force since 01 January 2000.
TopPurpose
The purpose of Incoterms is to create an internationally uniform set of regulations governing the interpretation of the most commonly used contractual terms in foreign trade agreements. Inconsistencies and uncertainties arising from the varying interpretation of such terms in different countries can be avoided or significantly reduced. Uniform guidelines reduce both the risk of legal complications and misunderstandings resulting from different trading practices.
Application - Validity
The application of Incoterms is confined to the delivery of movable, tangible goods, where the sale has already been concluded. Incoterms are only valid if they have been agreed upon in explicitly contractual terms, and have been named in purchase agreements, offers/quotations, general purchase and sale conditions, orders, order confirmations etc., or included in a separate agreement. Formulation proposal: e.g. CPT Madrid in accordance with Incoterms 2000.
What areas does it cover – What doesn’t it cover?
Incoterms are always to be interpreted as a component of a purchase agreement. They define the rights and obligations of buyers and sellers with regard to:
Delivery and transportation documentation (or equivalent electronic notifications)
Transfer of costs
Transfer of risk
Incoterms do not govern:
the transfer of ownership and other rights arising from ownership
breaches of contract and the consequences thereof
exclusions of liability as the result of special circumstances (force majeure, embargos etc.)
deadlines (delivery dates/periods are to be fixed)
types of transport (only limited)
conditions of other contracts
conditions with forwarders / carriers (Incoterms regard these merely as prepayment regulations)
Most important amendments to Incoterms 2000 compared to Incoterms 1990
FCA only two variations on delivery, i.e.
at the seller's premises (loading of the goods on the departing vehicle by the seller)
at another location (unloading of the arriving vehicle by the purchaser)
FAS Export clearance by the seller
DEQ Import clearance and related charges by the purchaser
DDU/DDP Goods are not made available to the purchaser in unloaded form, and the discharge costs are charged to the purchaser
Weaknesses remaining in Incoterms 2000
CIF The seller is obliged to provide only minimum coverage in line with Institute Cargo Clauses C = cover for loss or damage between the port of departure and the port of discharge.
CIP The seller is obliged to provide only minimum coverage in line with Institute Cargo Clauses C = cover for loss or damage between the point of departure and the destination stated.
DEQ no regulations exist for containerized goods
DES containerized goods must be examined for damage upon the arriving vessel, as the seller’s liability ends there.
Important legal information - please read the disclaimer before proceeding.
Products and services in these webpages are not available for US persons, for the exclusion of residents of other nations see the disclaimers relating to the actual services.
© UBS 1998-2008. All rights reserved.
