INCOTERMS® RULES
The Incoterms ® rules have become an essential part of the daily language of
trade. They have been incorporated in contracts for the sale of goods
worldwide and provide rules and guidance to importers, exporters, lawyers,
transporters, insurers and students of international trade.
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW Ex Works
"Ex Works" means that the seller delivers when it places the goods at the
disposal of the buyer at the seller's premises or at another named place
(i.e.,works, factory, warehouse, etc.). The seller does not need to load the
goods on any collecting vehicle, nor does it need to clear the goods for
export, where such clearance is applicable.
FCA Free Carrier
"Free Carrier" means that the seller delivers the goods to the carrier or
another person nominated by the buyer at the seller's premises or another
named place. The parties are well advised to specify as clearly as possible
the point within the named place of delivery, as the risk passes to the buyer
at that point.
CPT Carriage Paid To
"Carriage Paid To" means that the seller delivers the goods to the carrier or
another person nominated by the seller at an agreed place (if any such place
is agreed between parties) and that the seller must contract for and pay the
costs of carriage necessary to bring the goods to the named place of
destination.
CIP Carriage And Insurance Paid To
"Carriage and Insurance Paid to" means that the seller delivers the goods to
the carrier or another person nominated by the seller at an agreed place (if
any such place is agreed between parties) and that the seller must contract
for and pay the costs of carriage necessary to bring the goods to the named
place of destination.
'The seller also contracts for insurance cover against the buyer's risk of loss
of or damage to the goods during the carriage. The buyer should note that
under CIP the seller is required to obtain insurance only on minimum cover.
Should the buyer wish to have more insurance protection, it will need either
to agree as much expressly with the seller or to make its own extra insurance
arrangements."
DAT Delivered At Terminal
"Delivered at Terminal" means that the seller delivers when the goods, once
unloaded from the arriving means of transport, are placed at the disposal of
the buyer at a named terminal at the named port or place of destination.
"Terminal" includes a place, whether covered or not, such as a quay,
warehouse, container yard or road, rail or air cargo terminal. The seller bears
all risks involved in bringing the goods to and unloading them at the terminal
at the named port or place of destination.
DAP Delivered At Place
"Delivered at Place" means that the seller delivers when the goods are placed
at the disposal of the buyer on the arriving means of transport ready for
unloading at the named place of destination. The seller bears all risks
involved in bringing the goods to the named place.
DDP Delivered Duty Paid
"Delivered Duty Paid" means that the seller delivers the goods when the
goods are placed at the disposal of the buyer, cleared for import on the
arriving means of transport ready for unloading at the named place of
destination. The seller bears all the costs and risks involved in bringing the
goods to the place of destination and has an obligation to clear the goods not
only for export but also for import, to pay any duty for both export and import
and to carry out all customs formalities.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS Free Alongside Ship
"Free Alongside Ship" means that the seller delivers when the goods are
placed alongside the vessel (e.g., on a quay or a barge) nominated by the
buyer at the named port of shipment. The risk of loss of or damage to the
goods passes when the goods are alongside the ship, and the buyer bears all
costs from that moment onwards.
FOB Free On Board
"Free On Board" means that the seller delivers the goods on board the vessel
nominated by the buyer at the named port of shipment or procures the goods
already so delivered. The risk of loss of or damage to the goods passes when
the goods are on board the vessel, and the buyer bears all costs from that
moment onwards.
CFR Cost and Freight
"Cost and Freight" means that the seller delivers the goods on board the
vessel or procures the goods already so delivered. The risk of loss of or
damage to the goods passes when the goods are on board the vessel. the
seller must contract for and pay the costs and freight necessary to bring the
goods to the named port of destination.
CIF Cost, Insurance and Freight
"Cost, Insurance and Freight" means that the seller delivers the goods on
board the vessel or procures the goods already so delivered. The risk of loss
of or damage to the goods passes when the goods are on board the vessel.
The seller must contract for and pay the costs and freight necessary to bring
the goods to the named port of destination.
'The seller also contracts for insurance cover against the buyer's risk of loss
of or damage to the goods during the carriage. The buyer should note that
under CIF the seller is required to obtain insurance only on minimum cover.
Should the buyer wish to have more insurance protection, it will need either
to agree as much expressly with the seller or to make its own extra insurance
arrangements."
