Incom Terms 2010

 

EXW – Ex Works (at named place) (from industrial plant at named place). 

The seller delivers the goods at his premises without expert license and they are not carried to the conveyance. If the parties want the seller to be responsible for carrying goods to the conveyance and pay the price and take on the risk for the goods it is important to it is clearly stated in the purchase agreement.

FCA – Free Carrier (named place) (free of charge to carrier at named place)

The seller delivers the goods to the cargo-carrier, which the buyer chooses, at the place named in the terms. These terms apply to all modes of transport, including transportation via airplanes, trains or cars, and multimodal transport of container products.

FAS –  Free alongside ship (free of charge to the ship’s side)

The seller must deliver the goods by the ship’s side in stated port. The seller has to take care of the exportation files and fees. These terms only apply to sea transportation and transportation via rivers or lakes.

FOB – Free on board (named port of shipment) (free of charge on board) 

Delivery happens when the goods have crossed the railing of the ship as declared by the buyer. This means that from there the buyer is resposinble for all of the goods’s expenses and risks. The seller has to take care of the exportation files and fees. These terms only apply to transportation via sea, rivers, lakes and can not be used for multimodal transport or container shipment.

CFR – Cost and freight (named port of destination) (purchase price and carriage fee payed in the stated port)

The seller shall pay the fees and freight needed to get the goods to the named port of destination. The delivery happens and the risk, f.ex. of damage of the goods transfers though to the buyer as soon as the goods has been carried over the ship railing. These terms only apply to transportation via sea, rivers, lakes and can not be used for multimodal transport or container shipment.

CIF – Cost, Insurance and Freight (named port of destination) (purchase price, insurance and carriage fee to be payed named port of discharge)

The same applies as for CRF expect that the seller has to negotiate and pay the goods’s inscurance. The seller only has to pay minimum insurance unless otherwise is stated in the contract. These terms only apply to transportation via sea, rivers, lakes and can not be used for multimodal transport or container shipment.

CPT – Carriage paid to (named place of destination): (transport to be payed named port of discharge) 

The seller delivers the goods to cargo-carrier of his choice and the seller also has to pay the carriage fee to named destination. Risk and all other cost after this kind of delivery falls on the buyer. These terms may be used for all transportation, including multimodal transport and container shipment.

CIP – Carriage and insurance paid to (named place of destination): (transport and inscuranes to be payed named destination)

The seller delivers the goods to cargo-carrier of his choice and the seller also has to pay the carriage fee to named destination. Risk and all other cost after this kind of delivery falls on the buyer. When CIP terms are used the sender must also be insured for the risk of the buyer in case the goods gets lost or damaged while being transported. These terms may be used for all transportation, including multimodal transport and container shipment.

DAF – Delivery at Frontier (named place) (delivered at frontier at named place)

The seller has done his part of the deal delivering the goods when available to buyer unreleased from the conveyance, ready but has not been cleared through customs for exportation, at named place at the frontier. This could be any frontier, including the export country, so it is of the utmost importance that the frontier and place are named accurately. If the parties want the seller to take care of the unloading from the conveyance and be responsible for any possible damage that might happen, that has to be clearly stated. These terms can apply to transportation via land and may be used f.ex. for multimodal transport and container shipment.

DAT – Delivered at Terminal (delivered to named port, import fees not payed)

The seller is responsible for risk and costs until he arrives to the named port of loading, the goods unreleased from the conveyance. The buyer has to take care of the import files, provide import license and pay the import fees. It is important that the port of loading is stated in the contract.

DAP – Delivered Duty Paid (named port of destination) ( delivered, import fees payed at named destination) 

The seller is responsible for risk and costs until he arrives to the named destination, the goods unreleased from the conveyance. The buyer must provide import license and pay the import fees. It is important that the contract states where exactly the destination is, if not the seller can choose the place he thinks is best inside the area.

DDP – Delivered Duty Paid (named place of destination) ( delivered, import fees payed  at named destination) 

The seller is responsible for risk and costs until he arrives to the named destination, the goods are cleared for customs but unreleased from the conveyance. In these terms the seller has the most duties. It is important that the contract states where exactly the destination is, if not the seller can choose the place he thinks is best inside the area. If the parties want to exclude any fees that have to be payed when goods are imported, f.ex. value-added tax, that has be stated clearly in the purchase agreement.

Summary from “International Sales Contracts and General Conditions” by Guillermo Jiménez, published for knowledge and without responsibility.