Since 1936, the International Chamber of Commerce (ICC) in Paris has published the Incoterms® or an international, uniform regulation of essential buyer and seller obligations. They are used in offers, contracts, order confirmations, orders, conditions of purchase and sale, and Letters of Credit.
Until recently, the latest version of the terms was from 2000. However, a new version has been released, as of January 1, 2011, known as Incoterms 2010.
What are Incoterms?
The Incoterms are delivery terms for the national and international merchandise trade.
They are obligations of a national and international purchase contract between buyer and seller and, amongst other things,
clarify the questions:
- Who pays the transport cost to where?
- Where is the risk transfer, i.e. who assumes the risk, and when, in the event of damage or loss?
- Who must take out transport insurance to where?
- Who is responsible for export and import clearance?
Incoterms 2010
As a result of the new Incoterms, customers
should be aware that:
- the Incoterms must be explicitly agreed upon between buyer and seller with reference to Incoterms 2010
- they may not contradict themselves in the purchase contract
- they can now also be used for domestic business
- the destination location, destination port
and destination terminal must be specified
more precisely than in Incoterms 2000.
The ICC stresses that all contracts made under Incoterms 2000 remain valid after 2011. The ICC says that it recommends using
Incoterms 2010 after 2011, but parties to a contract for the sale of goods can agree to choose any version of the Incoterms rules
after 2011. However, it is important to clearly specify the chosen version.
It is also important to remember that the Incoterms do not regulate:
• transfer of ownership, notification of defects
• inability to deliver
• handling of payments
• legal venue
• and applicable law.
The Incoterms are neither common law nor commercial usage.
For more information on Incoterms 2010 visit:
http://www.iccwbo.org/incoterms
