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¡¡¡¡While the terms of sale in international business often sound similar to those commonly used in domestic contracts, they often have different meanings. Confusion over these terms can result in a lost sale or a financial loss on a sale. Thus, it is essential that you understand what terms you are agreeing to before you finalize1 a contract.

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¡¡¡¡Incoterms 2000

¡¡¡¡By the 1920s, commercial traders developed a set of trade terms to describe their rights and liabilities with regard to the sale and transport of goods. These trade terms consisted of short abbreviations for lengthy2 contract provisions. Unfortunately, there was no uniform interpretation3 of them in all countries, and therefore misunderstandings often arose in cross-border transactions.

¡¡¡¡To improve this aspect of international trade, the International Chamber4 of Commerce (ICC) in Paris developed INCOTERMS (International Commercial TERMS), a set of uniform rules or the interpretation of international commercial terms defining the costs, risks, and obligations of buyers and sellers in international transactions. First published in 1936, these rules have been periodically revised to account for changing modes of transport and document delivery. The current version is Incoterms 2000.

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¡¡¡¡ÎªÁ˶Թú¼ÊóÒ×µÄÕâÒ»ÁìÓò½øÐиĽø£¬ÉèÔÚ°ÍÀèµÄ¹ú¼ÊÉÌ»á(ICC)¿ª·¢ÁËÒ»Ì×ÓÃÓÚ½âÊÍÈ·¶¨¹ú½»ÒÇÖÐÂòÂôË«·½·ÑÓᢷçÏÕºÍÔðÈεÄͳһ¹æÔò——¹ú¼ÊóÒ×ÊõÓï½âÊÍͨÔò¡£¸ÃͨÔò³õ°æÓÚ1936£¬¶¨ÆÚ½øÐÐÐÞ¶©ÒÔ·´Ó³ÔËÊäºÍµ¥¾Ý½»¸¶·½Ê½µÄ±ä»¯¡£ÏÖÐеİ汾Ϊ¡¶¹ú¼ÊóÒ×ÊõÓï½âÊÍͨÔò2000¡·¡£

¡¡¡¡Use of Incoterms

¡¡¡¡Incoterms are not implied into contracts for the sale of goods. If you desire to use Incoterms, you must specifically include them in your contract. Further, your contract should expressly refer to the rules of interpretation as defined in the latest revision of Incoterms, for example, Incoterms 2000, and you should ensure the proper application of the terms by additional contract provisions. Also, Incoterms are not “laws”. In case of a dispute, courts and arbitrators will look at: 1) the sales contract, 2) who has possession of the goods, and 3) what payment, if any, has been made. See International Contracts, also by World Trade Press.

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¡¡¡¡Illustrated5 Guide to Incoterms

¡¡¡¡This guide was designed to give a graphic6 representation of the buyer‘s and seller’s risks and costs under each Incoterm. The material on each facing page gives a summary of seller and buyer responsibilities.

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