Importance of Incoterms

1539 WordsOct 17, 20127 Pages
What is the importance of incoterms? Explain your views with example? The goal of incoterms is to alleviate or reduce confusions over interpretations of shipping terms by outlining exactly who is obligated to take control, pay costs or passing of risk of loss or damage at a particular point in the shipping process. The INCOTERMS were created by the ICC and regulate the rights and obligations of buyers and sellers in international commodity handling. The incoterms are international rules for structuring a particular group of contractual clauses that are used in commercial agreements. Incoterms identify the physical point in the supply chain where risk of loss or damage passes from the seller to buyer. It also determines the point in the…show more content…
The title and risk pass to the buyer when the seller delivers the goods on board the ship. * If goods are air freighted use any mode of transport rule such as CIP * Both of these terms have insurance so that if loss or damages to goods during transport you will be covered well * Define and state well the following contractual terms * Goods (name, full description, brand ,model) * Terms of purchase, Incoterm * Price * Quality and quantity * Method of movement * Delivery dates * Delivery of documents * Insurance requirements * Packing requirements * Marks, numbers and other
Open Document