Incoterm

In: Business and Management

Submitted By sweetme92
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INCOTERMS© in international trade

When merchants conclude a contract for purchase and sale of goods, they are entitled to freely negotiate the special terms with regard to price, quantity, properties, etc., as well as carriage, risks and surrender of the goods. Businesses involved in exports, however, are frequently faced with different interpretations of identical formula and national commercial practices. To counteract the resulting imponderables, the parties to the contract can use what are known as Incoterms©, which offer a range of international rules for interpreting the main forms of contract used. Specifically, the Incoterm agreed by the parties determines which party is liable for the respective costs in the transport chain, for loading and unloading the goods and Customs clearance and at what point a party bears the risk of loss for an international shipment. Incoterms© also affect the basis on which the imported goods are valued for Customs.
The goal of the Incoterms is to alleviate or reduce confusion over interpretations of shipping terms, by outlining exactly who is obligated to take control of and/or insure goods at a particular point in the shipping process.

Incoterms regulate:

The distribution of documents.
The conditions for delivering goods.
The cost of transporting goods.
The responsibility of risk in shpping the goods.
Incoterms - International Commercial Trade Terms for sale of goods

INCOTERMS

The most complex & important tool of International Trade is Language. Small changes in wording can have a major impact on all the aspects of Business agreement, esp. in International Trade. For Business terminology to be effective, phrases must mean the same thing through out the industry. This is where “Incoterms” comes into existence.

“Incoterms” is devised & published by the International Chamber of Commerce in 1936.…...

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