Incoterms & Trade Contracts

Incoterms & Trade Contracts

Different countries have different business cultures and languages. It’s a good idea to make sure you have a clear written contract to minimise the risk of misunderstandings. The (International Commercial Terms) are a series of predefined commercial terms widely used in international commercial transactions.

The contract should set out where the goods are being delivered. It should cover who is responsible for every stage of the journey, including customs clearance, and what insurance is required. It should also make it clear who pays for each different cost.

To avoid confusion, internationally agreed Incoterms should be used to spell out exactly what delivery terms are being agreed, such as:

  • Where the goods will be delivered.
  • Who arranges transport.
  • Who is responsible for insuring the goods, and who pays for insurance.
  • Who handles customs procedures, and who pays any duties and taxes.

As well as including delivery details, the contract should cover payment. This should include what currency payment will be made in, how much will be paid, when payment is due and what payment method will be used.

The chart below lists the current Incoterms® along with where the obligations lie and where the transfer of risk applies.

Join Online Today!

Our membership process is quick and easy – just fill out the online sign-up form or give us a ring!