International Commercial Terms, or Incoterms, are a set of internationally recognised terms that clarify the responsibilities of the buyer and seller when goods are being transported.
It's for these reasons that the International Chamber of Commerce issues its Incoterms®, or International Commercial Terms.
This is a series of internationally-recognised terms that are used to clarify the duties and the responsibilities of both seller and buyer in regards to the goods being transported. There are currently 11 Incoterms.
Each Incoterm® is a three-letter abbreviation (see below). Incoterms® should be used in any international sales contract as they make clear:
- Whether the exporter or importer is responsible for organising and paying for delivery;
- Where delivery actually takes place;
- At which point the risks associated with the delivery pass from the exporter to the importer.