|While the terms of sale in international business often sound similar to those commonly used in domestic contracts, they often have different meanings. Confusion over these terms can result in a lost sale or a financial loss on a sale. Thus, it is essential that you understand what terms you are agreeing to before you finalize a contract. |
Incoterms 2000By the 1920s, commercial traders had developed a set of trade terms to describe their rights and liabilities with regard to the sale and transport of goods. These trade terms consisted of short abbreviations for lengthy contract provisions. Unfortunately, there was no uniform interpretation of them in all countries, and therefore misunderstandings often arose in cross-border transactions.
To improve this aspect of international trade, the International Chamber of Commerce (ICC) in Paris developed INCOTERMS (INternational COmmercial TERMS), a set of uniform rules for the interpretation of international commercial terms defining the costs, risks, and obligations of buyers and sellers in international transactions. First published in 1936, these rules have been periodically revised to account for changing modes of transport and document delivery. The current version is Incoterms 2000.
Use of IncotermsIncoterms are not implied into contracts for the sale of goods. If you desire to use Incoterms, you must specifically include them in your contract. Further, your contract should expressly refer to the rules of interpretation as defined in the latest revision of Incoterms, for example, Incoterms 2000, and you should ensure the proper application of the terms by additional contract provisions. Also, Incoterms are not “laws.” In case of a dispute, courts and arbitrators will look at: 1) the sales contract, 2) who has possession of the goods, and 3) what payment, if any, has been made. See International Contracts, also by World Trade Press.
Illustrated Guide to IncotermsThis guide was designed to give a graphic representation of the buyer’s and seller’s risks and costs under each Incoterm. The material on each facing page gives a summary of seller and buyer responsibilities.
Incoterms Do . . .Incoterms 2000 may be included in a sales contract if the parties desire the following:
Incoterms Do Not . . .
Incoterms 2000 are not sufficient on their own to express the full intent of the parties. They will not:
1. Apply to contracts for services.
2. Define contractual rights and obligations other than for delivery.
3. Specify details of the transfer, transport, and delivery of the goods.
4. Determine how title to the goods will be transferred.
5. Protect a party from his/her own risk of loss.
6. Cover the goods before or after delivery.
7. Define the remedies for breach of contract.
Tip: Incoterms can be quite useful, but their use has limitations. If you use them incorrectly, your contract may be ambiguous, if not impossible to perform. It is therefore important to understand the scope and purpose of Incoterms—when and why you might use them—before you rely on them to define such important terms as mode of delivery, customs clearance, passage of title, and transfer of risk.
Organization of IncotermsIncoterms are grouped into four categories:
Mode of TransportNot all Incoterms are appropriate for all modes of transport. Some terms were designed with sea vessels in mind while others were designed to be applicable to all modes. The following table sets out which terms are appropriate for each mode of transport.
Helpful DefinitionsPre-carriage-The initial transport of goods from the seller's premises to the main port of shipment. Usually by truck, rail or on inland waterways.
Main carriage-The primary transport of goods, generally for the longest part of the journey and generally from one country to another. Usually by sea vessel or by airplane, but can be by truck or rail as well.
On-carriage-Transport from the port of arrival in the country of destination to the buyer's premises. Usually by truck, rail or on inland waterways.
Nhãn: Kiến thức XNK