Incoterms are a set of 11 trading conditions for use in business contracts for the sale and purchase of goods. They describe the obligations of the buyer and seller in the event of a transfer of risk between the two parties and the party responsible for transportation, unloading and related matters. They are divided into four rules for the use of goods by water and seven rules that can be used with any mode of transport. It is important to ensure that other contractual obligations are taken separately, such as payment terms. B, the transfer of ownership, as well as the consequences of an infringement, which are normally dealt with in a Service Level Agreement (SLA). If the parties expect all other contractual aspects to be covered by a selected incoterm, this will have serious negative effects. Many disputes are the result of the business community that does not understand the importance of creating a sales contract that deals with the interests of the seller and the buyer. Incoterms apply only if they are included in the sales contract or if .B. in the offer, under the terms of sale, in the order, in the confirmation of the order or if they are the subject of a separate agreement by the parties. With Incoterms` revised new sentence and its requirements, it is important to note that if you want the Incoterms on your contractual application, legal members who participate as an inter-service team must ensure that they must clarify the contract by saying: yes, all contracts that use any Incoterms are valid if they are agreed by all parties to the transaction. correctly identified on export-related documents.
Although CCI recommends using Incoterms® 2020 from 1 January 2020, parties to a sales contract may agree to use each version of Incoterms after 2020. You must clearly state the selected version of Incoterms (incoterms® 2010, Incoterms® 2020 or an earlier version). Nor are incoterms sufficient on their own to deal with all aspects of the sale and purchase of goods, even for a simple delivery contract. For example, if one refers only to a particular incoterm in an order without additional conditions, this means that the contract does not deal with issues such as the existence of legislation on goods, the control and receipt of goods, price, payment mechanisms, force majeure, breach of contract, termination and dispute resolution procedures. None of these issues are dealt with by Incoterms, which deals only with transport-related issues. Therefore, these clauses must be included, among other things, in the supply contract concerned. CFR – Fresh and freight: The seller is considered to be delivered when the cargo is placed on board the ship in the shipping port. The seller is also responsible for the transport costs necessary to transport the goods to that destination. Although the insurance issue remains silent after this Incoterm, the buyer is supposed to acquire his own insurance. The most used incoterms® 2010 in the sale and purchase of resources raw materials include Delivered at Place (DAP), Free on Board (FOB) and Costs, Insurance and Freight (CIF), each of which describes in more detail below. No replacement of a sales contract: although incoterms® 2010 faces a number of important issues related to the sale and purchase of goods, they do not replace a purchase contract, as they do not offer full terms of sale and purchase. Incoterms® 2010 does not address issues such as price, payment mechanisms, specifications, force majeure, violation and termination, dispute resolution or applicable legislation.
Even if the incoterms ® 2010 deal with a particular issue, the purchase of goods may need to be extended to the corresponding obligations. Under the CIF, for example, the seller is required to receive insurance only on a minimum guarantee.