Incoterms are created under a registered trademark by the International Chamber of Commerce (ICC) and are designed to facilitate world trade by providing clear definitions of each country's obligations, in order to reduce the potential opportunities leading to legal complications. Incoterms conditions are updated regularly to keep up with the ever-changing world of international trade.
According to Emanuel Jolivet, chief adviser to the International Court of Arbitration:
"INCOTERMS are an ideal example of effective standardization of an international business instrument. Their day-to-day use in international sales contracts provides legal certainty for business transactions, while simplifying the preparation of international contracts. "
Incoterms cover who, what and when issues in international sales of goods and supplies, including:
- Who does what;
- Who pays what;
- When the risk passes from the seller to the buyer;
- When the delivery is made;
In addition, the rules specify insurance, export and import clearance, as well as the distribution of other costs related to the delivery of goods between the buyer and the seller.
Incoterms do not cover ownership or title to goods, details of payment obligations, vessel requirements, termination, bankruptcy, etc. They do not constitute a complete contract of sale. However, they are explicitly referred to or mentioned in both international and many local sales contracts sale.
Incoterm conditions are not designed to be applied automatically - they are subject to negotiation and negotiation, and in most cases a successful buyer or seller is often the one who is best at negotiating the terms of sale.
Incoterms are used as Terms of Sale, acting as International Trade Terms. Incoterms 2010 sets out the terms of shipment and delivery, as well as those of risk transfer between buyer and seller.
Due to major changes in their latest version, as well as for their proper use, the agreed location plus "Incoterms 2010" should be indicated. The agreed place is the place where the responsibility for the costs for the seller ends and at the same time is the point of delivery of the seller, except in the "C" terms.
Their latest edited edition is Incoterms 2010, which is effective from January 1, 200 and replaces Incoterms 2000.
Incoterms consist of 4 (four) main groups of terms:
- 'E' - conditions where the seller's obligation and control over delivery is minimal
- "F" - conditions where the main burden on the buyer is to arrange the main shipments
- "C" - conditions where the main burden on the seller is to arrange the main shipments
- 'D' - conditions where the seller's obligations and control over delivery are maximized
And include a total of 11 (eleven) conditions: