International Commercial Contracts - Incoterms

What are Incoterms?

International Commerce Terms (Incoterms) are an internationally recognised standard trade terms that set out buyer and seller responsibilities. Incoterms are maintained and developed by the International Chambers of Commerce (ICC).

Each Incoterm establishes who is responsible for costs and risks such as transport costs, insurance, duties payable and customs clearance. Incoterms are accepted by governments, legal authorities and businesses worldwide for the interpretation of most commonly used terms in international trade. This reduces or removes uncertainties and often costly misunderstandings arising from different interpretation of such terms in different countries. Incoterms apply to both domestic and international sale contracts. SeeĀ Incoterms and contracts.

Before you use Incoterms, consider the country of the buyer. Some countries stipulate that set Incoterms are used, while others set chosen Incoterms as standard practice. Transport may also affect your choice as some Incoterms can only be used for transport by sea and inland waterways.

The latest set of Incoterms, known as Incoterms 2010, came into force on 1 January 2011.