incoterms2010-eng.docVIP

International Trade Terms are Renewed: Incoterms ? 2010 1. Purpose and Scope of Incoterms a) Purpose The purpose of Incoterms is, as stated by ICC “to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree”. Since international sales contracts are generally realized between the non-present parties from different nationalities, it is very important how the parties interpret the terms and the abbreviations commonly used in foreign trade. By this regulation of Incoterms, at least the confusions and the differences of interpretation will be overcome and the conflicts arising out of international trade will be reduced. b) Scope The scope of the Incoterms is limited to the rights and obligations of the parties’ arising from the delivery of the sale of goods. Incoterms do not define the goods, but the goods should be understood as commodities. Incoterms do not regulate any contract other than sale contract. However, even in a sale contract, Incoterms do not cover all the contractual aspects. The topics that Incoterms govern can be gathered under four groups: (i) the delivery of goods, (ii) transfer of risks, (iii) division of costs, and (iv) obligations concerning the documents. Incoterms do not provide rules for the (i) payment and payment methods, (ii) transfer of ownership, (iii) variants, (iv) dispute resolution and (v) other issues relating to fulfilment of the contract. 2. Incoterms? 2010 a) Need for Changes It is stated under the Foreword of Incoterms? 2010, since the creation of the Incoterms? rules by ICC in 1936, this globally accepted contractual standard has been regularly updated to keep pace with the development of international trade. It is also stated that the continued spread of customs-free zones, the increased use of electroni