Incoterms is a set of definitions of international trade custom. It includes the definitions of eleven international custom of trade. Each of them has got a name which is abbreviated with three letters. When the seller and the buyer decide to include such an abbreviation in their contract of trade, it means that they will follow that custom of trade and decide about mutual obligations.
The term of delivery is
- part of the contract of trade
- definition of the custom of trade
- intended for the international sale of goods
It defines e.g. following things in the mutual relation between the seller and the buyer
- delivery and taking delivery
- division of costs
- transfer of risk
- other mutual obligations
The term of delivery does not define
- relations between the seller/ the buyer and any third party
- title to the goods (“ownership”)
The term of delivery is not a part of the contract of carriage. It may give third parties information about seller’s and buyer’s obligation concerning the delivery of goods.
Because the term of delivery defines the obligations in delivering the goods, the term should always be in accordance with the agreed custom of trade.
Incoterms-terms of delivery define the mutual obligations of the seller and the buyer. The terms do not define those matters, which are in the own interest of the contracting party.
The seller and the buyer are the parties to the contract of trade. All subcontractors, such as carriers, forwarding agents and stevedores, are acting either on behalf of the seller or on behalf of the buyer.
The main features of these eleven terms are presented below. The first seven terms are for all modes of transport. The four latter terms are for sea or inland waterways transport only.