Incoterms refer to the set of international rules for the interpretation of the key terms used in foreign trad

Question

Incoterms refer to the set of international rules for the interpretation of the key terms used in foreign trade contracts. Explain why the guidelines issued under Incoterms 2000 can be particularly useful to an international contract

Answer 1

To move goods from a seller to a buyer, someone has to pay for transporting the goods, arrange the transportation, clear the goods through Customs, pay any appropriate duty and taxes, and then unload them at their final destination. Incoterms define at what point responsibility for goods transfers from the seller to the buyer.

By having an internationally recognized definition of when that transfer occurs--which is what Incoterms do--you reduce disagreements and misunderstandings of who is responsible for what.