The Incoterms rules are standard sets of trading terms and conditions designed to assist traders when goods are sold and transported.
Each Incoterms rule specifies:
So by agreeing on an Incoterms rule and incorporating it into the sales contract, the buyer and seller can achieve a precise understanding of what each party is obliged to do, and where responsibility lies in event of loss, damage or other mishap.
The Incoterms rules are created and published by the International Chamber of Commerce (ICC) and are revised from time to time. The most recent revision is Incoterms 2020 which comes into force on 1st January 2020.
The definitive publication on the Incoterms 2020 rules is the ICC publication number 723, which is available from various national bookshops.
This is essential reading for those with responsibility for setting a corporate policy or negotiating contracts with trading partners or service providers.