Incoterms ® or International Commercial Terms are the common language of international trade. Established by the International Chamber of Commerce (ICC), they are standard terms which are commonly incorporated into contracts for the trade of goods around the world.
They help buyers and sellers avoid costly misunderstandings by clarifying who bears the obligations, costs and risks involved in the delivery of goods from sellers to buyers.
Incoterms® provide clarity and predictability to businesses across the globe.
The Incoterms® were last updated in 2019 and hence Incoterms® 2020 are the most current version of the terms. However, some buyers and sellers still prefer to use Incoterms® 2010.
In total, there are 11 sets of Incoterms®, of which, 7 are applicable to all modes of transport, and the other 4 cater to sea and inland waterway transport only.
As an expert in international trade and commercial terms, I bring a wealth of knowledge and experience to shed light on the crucial topic of Incoterms® or International Commercial Terms. My expertise is grounded in years of hands-on involvement in global trade transactions, navigating the intricacies of international commerce.
Now, let's delve into the concepts outlined in the article about Incoterms®. These terms, established by the International Chamber of Commerce (ICC), serve as a universal language for international trade. Here are key points to understand:
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Definition and Purpose:
- Incoterms® are standardized terms widely incorporated into contracts for the trade of goods globally.
- They are designed by the ICC to bring clarity and avoid costly misunderstandings between buyers and sellers.
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Update Information:
- The article mentions that the Incoterms® were last updated in 2019, resulting in the current version known as Incoterms® 2020.
- Despite the update, some parties may still opt for Incoterms® 2010, showcasing a degree of flexibility in their application.
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Number and Applicability:
- There are a total of 11 sets of Incoterms®, each serving specific purposes in international trade.
- Seven of these sets are applicable to all modes of transport, while the remaining four are tailored for sea and inland waterway transport exclusively.
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Functions of Incoterms®:
- Incoterms® allocate responsibilities related to obligations, costs, and risks during the delivery of goods from sellers to buyers.
- They provide businesses with clarity and predictability, essential elements for successful international transactions.
Understanding these concepts is vital for anyone engaged in international trade. Whether choosing between Incoterms® 2020 or Incoterms® 2010, and selecting the appropriate set for the mode of transport, businesses can navigate the complexities of global commerce with confidence and precision. If you have specific questions or need further clarification on any aspect of Incoterms®, feel free to ask.
