Incoterms

Incoterms are the international rules for the interprepation of trade terms used in intternational trade, formulated by the International Chamber of Commerce.

Incoterms (197 KB)

About Incoterms

While the terms of sale in international business often sound similar to those commonly used in domestic contracts, they often have different meanings. Confusion over these terms can result in a lost sale or a financial loss on a sale. Thus, it is essential that you understand what terms you are agreeing to before you finalize a contract.

Incoterms are not implied into contracts for the sale of goods. If you desire to use Incoterms, you must specifically include them in your contract. Further, your contract should expressly refer to the rules of interpretation as defined in the latest revision of Incoterms, for example, Incoterms 2000, and you should ensure the proper application of the terms by additional contract provisions. Also, Incoterms are not "laws." In case of a dispute, courts and arbitrators will look at:

1. the sales contract,
2. who has possession of the goods, and
3. what payment, if any, has been made. See International Contracts, also by World Trade Press.