Incoterms (International Commercial Terms) are commonly used in international contracts and clearly set out the obligations, risks and costs associated with the commercial transaction up to the moment of delivery of the goods at the named port or place. Thus, both the seller and the buyer will always be aware of the extent of their role and responsibility in the commercial transaction.

When Incoterms 2020 are incorporated into the contract of sale, they prevent both the buyer and the seller from having to include detailed information – in excess – on the conditions of delivery of the goods.

Furthermore, it is necessary to point out that Incoterms 2020 are not mandatory under international law. Their validity is granted by the contracting parties at the time they agree to them.

The type of Incoterm agreed must be reflected in the sales documents relating to the corresponding commercial transaction (sales invoices, pro forma invoices, valued delivery notes, etc.).

Incoterms indicate the distribution of obligations, risks and costs between the parties in international sales. Thus, we can point out:

➔ Loading and unloading obligations.
➔ Transfer of risks: When are risks transferred?
➔ Delivery obligations: Where and when does delivery take place?
➔ Transport: Who undertakes the main carriage, and secondary carriage?
➔ Insurance: Who assumes the obligation to insure the goods?
➔ Customs clearance for export and import: Who is responsible for this?