Incoterms® are standardized terms and conditions developed by the International Chamber of Commerce (ICC) to facilitate the delivery of goods in international trade. They define the roles of the seller and the buyer, making business transactions smoother. The Incoterms 2020 rules are divided into two categories: 7 rules for all modes of transport and 4 rules for transport by sea or inland waterway.

The Incoterms® 2020 rules for all modes of transport include:

• EXW (Ex Works): The seller makes the goods available at their premises, and the buyer is responsible for transportation costs to their warehouse.
• FCA (Free Carrier): The seller delivers the goods to the buyer’s carrier at their location. The buyer handles export clearance and assumes risks and costs to the final destination.
• CPT (Carriage Paid To): The seller delivers the goods to the buyer’s carrier at the named place of shipment. The seller covers export clearance, transportation costs, and risks until delivery to the carrier.
• CIP (Carriage and Insurance Paid To): The seller’s responsibility ends when they have delivered the goods to the carrier specified by the buyer at the named place of shipment in the initial country. The seller is responsible for export clearance, transportation costs, and insurance coverage to protect against risks during transportation until the goods are delivered to the buyer.
• DAP (Delivered at Place): The seller is responsible for costs until delivery to the named destination, except for taxes and import formalities.
• DPU (Delivered at Place Unloaded): The seller bears all costs and risks until the goods are unloaded at the specified destination facility.
• DDP (Delivered Duty Paid): The seller handles all expenses and import duties, delivering the goods to the buyer’s destination.

The Incoterms® 2020 rules for transport by sea or inland waterway include:

• FAS (Free Alongside Ship): The seller’s responsibility ends when they have delivered the goods alongside the vessel at the specified port of shipment. The buyer is responsible for loading costs, transportation costs, risks during loading, and all costs from the moment the goods are delivered alongside the vessel. The buyer also handles the export formalities.
• FOB (Free on Board): The seller’s responsibility ends when they have delivered the goods across the ship’s rail at the specified port of shipment. The seller handles the export formalities, transportation costs, and other expenses, including the risks during transportation. The buyer assumes all risks once the goods have passed the ship’s rail.
• CFR (Cost and Freight): The seller’s responsibility ends when they have delivered the goods across the ship’s rail at the specified port of shipment. The seller handles the export formalities, transportation costs, and risks until the goods are loaded onto the vessel. The buyer assumes all remaining costs, risks during transportation, and unloading costs.
• CIF (Cost, Insurance, and Freight): The seller’s responsibility ends when they have delivered the goods across the ship’s rail at the specified port of shipment. The seller handles the export formalities, transportation costs, and insurance coverage to protect against risks during transportation until the goods are loaded onto the vessel. The buyer assumes all remaining costs, risks during transportation, and unloading costs.

Incoterms® are crucial for international business, ensuring clarity and understanding among all parties involved. Along with choosing the appropriate Incoterms, it’s important to draft agreements with the help of contract experts who specialize in their respective fields. These experts provide customized agreements, paying attention to detail while ensuring concise and clear language. They also offer guidance and continuous support throughout the process to protect your rights and achieve your objectives.

The considering various factors such as:

• Expertise
• Customization
• Comprehensive attention to detail
• Concise and clear
• Continuous support
• Reasonable service rate

At IDG, we believe that well-drafted agreements are the foundation of successful business transactions. Our experienced lawyers and comprehensive legal content can help you create strong agreements that safeguard your rights and promote confidence in achieving success.

Why should you choose us?

Expertise: Our contract team specializes in their respective fields and possesses in-depth knowledge of drafting agreements of various types. We continuously update news and legal regulations to provide accurate, comprehensive, and reliable information.

Customization: We understand that each agreement is unique and should not have similar terms. Our contract team provides services in drafting agreements by adapting and adjusting the terms according to your needs and necessities while complying with legal frameworks. We aim to write agreements that protect your rights and benefits to the fullest extent.

Comprehensive attention to detail: We have a contract team that provides consultation and thoroughly reviews and revises the content and terms of the agreement. This helps reduce risks and errors to a minimum, ensuring the utmost protection for you.

Concise and clear: We understand that legal language may sometimes feel complex. Our contract team excels in categorizing agreements into clear and concise subparts, making it easier for you to understand legal principles and the specific conditions and terms of the agreement.

Guidance according to requirements: In addition to drafting agreements, our contract team can provide valuable advice to assist you in making well-founded decisions. We aim to equip you with the necessary knowledge and understanding to protect your rights, benefits, and achieve your objectives.

Continuous support: We are committed to supporting you throughout the journey of achieving your goals according to the agreement. Our contract team provides support and guidance, offering legal assistance whenever you need it.

Contact us today! to learn more about how we can assist you in drafting various agreements.