Incoterms are a set of international trade terms that set out rules and responsibilities for the exchange of goods between buyers and sellers in international transactions. They were developed and published by the International Chamber of Commerce (ICC) to standardize and clarify the rights and obligations of parties involved in international trade.
Incoterms define key aspects of a transaction, such as the delivery of the goods, the transfer of risks, the costs and liability of transportation, insurance and customs formalities. These terms help to avoid misunderstandings and conflicts by setting out the responsibilities of each party clearly and specifically.
There are different categories of Incoterms, such as terms for any mode of transport, such as EXW (Ex Works), FCA (Free Carrier), CPT (Carriage Paid To), among others, and exclusive terms for maritime transport, such as FOB (Free On Board), CFR (Cost and Freight), CIF (Cost, Insurance and Freight), among others.
It is important to note that the Incoterms do not cover legal aspects such as ownership of goods, customs duties or payment terms. These should be addressed in a separate commercial contract.
Incoterms are regularly updated to adapt to new practices and needs of international trade. It is essential that the parties involved in a transaction are familiar with the Incoterms and use them correctly to avoid misunderstandings and ensure successful execution of the transaction.