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Incoterms Incoterms, International commercial terms are international rules in a dictionary format, the purpose of which is to unambiguously interpret the most widely used trade terms in the field of foreign trade.

Thus, it can significantly reduce the uncertainties of different interpretations of the terms in different countries. Frequently, parties to a contract are unaware of the different trading practices in their respective countries. This can give rise to misunderstandings, disputes and litigation.

To resolve possible misunderstandings International Chamber of Commerce has been published for the first time in 1936, the set of international rules for the interpretation of trade terms. These rules were known as "Incoterms 1936". Amendments and additions were published in 1953, 1967, 1976, 1980, 1990, 20002010 years to bring these rules in line with modern international trade practice.

International trade terms are the standard terms of international sales contracts, which are defined in advance in an internationally recognized document, in particular, used the sales contract in a standard developed by the International Chamber of Commerce.

The basic principles laid down in terms of Incoterms are 

1.Raspredelenie between buyer and seller of transportation costs for delivery of goods, ie, determining which costs and how long the seller bears, and which, from what moment, the buyer.

2.Moment transfer from the seller to the risk buyer (LIABILITY) for any damage, loss or accidental destruction of the goods.

3.Opredelenie date of delivery of the goods, that is the definition of the actual transfer of the goods by the seller to the buyer or his representative.  

Keep in mind that the scope of Incoterms is limited to matters relating to the rights and obligations of parties to the contract of sale in respect of the delivery of goods sold (the word goods here of "tangibles", not including "intangibles" such as computer software).

Beyond the Incoterms rules are the transfer of ownership from the seller to the buyer, as well as the consequences of failure by the parties obligations under the contract of sale of goods, including the grounds for exemption from liability of the parties that governed by the applicable law or the Vienna Convention. The structure is formed in terms of volume growth of duties sequence Seller in respect of the basic conditions of supply.

The key to the use of Incoterms: is that the regulation of the moment of the transfer of ownership should be regulated separately in the contract, it is important that the transfer of ownership coincided transition to the buyer the risk of accidental loss or risk of damage to the goods.


Most often in practice, there are two particular misconceptions about Incoterms.

1. Misunderstanding of the Incoterms as applying to the contract of carriage, and not to the contract of sale.

2. The misconception that they have to cover all the duties which parties may wish to include in the contract.

Incoterms regulate only the relationship between sellers and buyers under the sale and purchase agreements, moreover, only in certain aspects. At that time, both exporters and importers to consider the very practical relationship between the various contracts needed to perform an international sales transaction - where not only the contract of sale, but also contracts of carriage, insurance and financing.  

Incoterms relate to only one of these contracts, namely the contract of sale.

It should be stressed that Incoterms are not intended to replace the terms of the agreement, necessary for a complete contract - sale either by the incorporation of standard terms or by individually negotiated terms.

Incoterms do not regulate the consequences of breach of contract and release from liability owing to various impediments. These issues must be resolved by other stipulations in the contract - sale and the applicable laws.

Incoterms were always originally intended to be used when goods were sold for delivery across national borders: thus Incoterms are international trade terms.


Each of the rules "Incoterms" are grouped into basic categories, each of which has a clear direction, defined as a term.

Each term is an abbreviation, the first letter indicates the point of transition of obligations and risks from the seller to the buyer.

  • Group E - Shipping, transfer of liabilities - at the place of departure (departure). The seller must deliver goods to the buyer directly by the manufacturer, its warehouse, customs clearance of the goods the seller is not made; Seller is not responsible for loading the goods on the vehicle.
  • Group F - Main carriage paid by the seller (main carriage unpaid), the transfer of liabilities from the departure terminal for the main carriage. The Seller undertakes to deliver the goods at the disposal of the carrier, which the buyer hires its own.
  • Group C - Main carriage paid by the seller (main carriage paid), the transfer of liabilities - at the arrival terminal for the main carriage. The seller must contract for carriage of the goods, but without assuming the risk of its accidental loss or damage to the goods.
  • Group D - Arrival, transfer of liabilities to the buyer, a full service (arrival). The seller bears all shipping costs and assumes all risks prior to delivery of the goods to the destination country.

Incoterms in picture