Incoterms are terms established by the International Chamber of Commerce that are used in international trade to define the obligations and responsibilities assumed by the buyer / exporter and seller / importer of a product.
The Incoterms are divided into 4 groups:
Incoterms Group E
The seller has only the obligation to make the goods available to the buyer in his warehouse, the buyer has to organize the collection and maritime or air transport to his country and assumes all the expenses.
Incoterms Group F
The seller prepares and delivers the merchandise at the agreed port and the buyer assumes international transportation to his country.
Incoterms Group C
The seller takes charge of transportation and expenses to the port of discharge, where the buyer must pick up the goods.
Incoterms Group D
The seller delivers the goods at a specific point in the country of destination.
Why are Incoterms used?
- They clearly define what are the rights and obligations of the parties involved in an international negotiation.
- They show the commitment of each party (buyer, seller).
- It allows both parties to know up to which place or situation an operation generates risk.
- They deal only with the relationship between sellers and buyers in a sales contract or in international negotiation as such.
- They are uniform and with legal recognition throughout the world.
- In case of any litigation, controversy, or in the worst case, lawsuits, the legal body that will take the case, has internationally accepted uses and terms with uniform criteria and bases to demand compliance with the obligations and responsibilities of the parties involved.