WHAT IS INCOTERM ?
INCOTERM provides a set of international rules for the interpretation of the most commonly used trade terms. It clearly defines the role and responsibility of seller and buyer in the trade term so that there is no scope for ambiguity or misinterpretation. Among the best known INCOTERMS are EXW (Ex works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid), and CPT (Carriage Paid To). ICC introduced the first version of Incoterms – short for “International Commercial Terms” – in 1936. Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with the development of international trade. The latest version is INCOTERM 2000, so all sales contracts made after January 1′ 2000 will refer to INCOTERM 2000 unless there is any special agreement between seller and buyer. Correct use of Incoterms goes a long way to providing the legal certainty upon which mutual confidence between business partners must be based. To be sure of
