INCOTERMS are a set of uniform rules that define the trade terms in international arena. These define the rights and obligations of parties involved in an international transaction.
The INCOTERMS are drafted and published by ICC (International Chamber of Commerce)
INCOTERMS do not cover ownership or the transfer of title of goods. It is crucial to agree on the INCOTERMS at the start of the negotiation between the buyer and seller, as it affects the costs and responsibilities involved in shipping, insurance and tariffs.
Following, are the standard INCOTERMS 2010 :
The seller fulfills his obligation to deliver when the goods have been made available to the buyer at the named place in the country of importation. The seller has to bear all costs and risks involved in delivering the goods thereto including duties and taxes and other official charges payable upon importation. Whilst the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation.
INCOTERMS are designed to arrange for the transfer of risk from seller to buyer at an unambiguous convenient place where goods can be inspected.
The Final choice of INCOTERM used in the contract is for negotiation between buyer and seller.