COMPARATIVE STUDY OF VARIOUS

INTERNATIONAL COMMERCIAL TERMS

(INCOTERMS) USED IN THE
SALE - PURCHASE CONTRACTS
Fahad Mahmud Mirza
Abstract INCOTERMS (International Commerial Term!) are
t"e Trade term!# $%&li!"e' &( t"e International C"am&er o)
Commere (ICC)* T"e!e term! are ommonl( %!e' in
international ontrat! an' are o) t"e $rini$le to la( 'o+n t"e
r%le! to "arateri,e t"e role an' t"e om$%l!ion! (&ot" )inanial
an' le-al re!$on!i&ilitie!) &et+een t"e Seller! an' t"e .%(er!#
in/ol/e' in an international ommerial tran!ation in/ol/in-
arria-e o) mer"an'i!e# -lo&all( )rom one $lae to anot"er* T"e
$a$er 'i!%!!e! t"e $ro$ortional re!$on!i&ilitie! an' lia&le
o&li-ation! on t"e Seller an' t"e .%(er %n'er INCOTERMS
-ro%$! an' !tatement!# an' "o+ e))eti/e t"e term! an $la( t"eir
role on ma0in- t"e tra'e omm%niation o) le-alitie! ea!ier*
I. INTRODUCTION
The economic market and trade traffic of this century beyond
doubt consists of singe uni!ersa market. The "uyers and
#eers most of the times find themse!es on different
continents in different $arts of the %ord& they communicate
by ha!ing a uniform and homogeneous set of trading& chiefy
kno%n as International Commercial Terms 'INCOT(RM#) to
he$ understand and route $ro$ery through internationa
transactions and aso carify each of the "uyer*s and #eer*s
roe in this su$$y chain of trade and transactions.
INCOT(RM# are a series of !arious internationa saes terms&
%hich %ere first& $ubished by Internationa Chamber of
Commerce 'ICC) back in +,-.& and then in the $resent dates
of /000& /00, and no% /0+0. In the eary +,00*s& many of the
internationa traders& %ho %ere situated in di!erse regions of
the %ord& de!ised a set of short abbre!iations used for certain
fre1uenty $racticed trading terms. On the other hand& due to
dis$arity in cuture& associations& anguage and synta2&
kno%edge and e2$erience& transations and inguistics& these
trading terms had dissimiar meanings for these di!erse goba
members of trade. The rise in confusion and common errors
became a consistent stam$ and a constant risk in internationa
trading and shi$$ing. For that reason& in order to encourage
consistency and eiminate confusion& the Internationa
Chamber of Commerce 'ICC) in +,-. de!eo$ed one standard
and homogeneous set of IN3'Internationa)3CO3'Commercia)3
T(RM# for the traders %ord%ide to acce$t and $ractice.
#ince then& these INCOT(RM# ha!e $ayed a key roe in
goba business of e2change& and they s$ecificay address
certain key res$onsibiities and com$usions& he$ing institute
momentous and considerabe 4markers5 aong the chain of the
micro3ogistics mechanism 6/7.
There basic use is to define the reationshi$ bet%een the buyer
and the seer& regarding the mode of dei!ery and to 8ustify
the member %ho is su$$osed to organize for customer
cearances and icenses. 9ong %ith the $assage of tite& these
terms are used to iuminate as either %ho has to obtain
insurance of the goods and merchandise during the trans$ort&
generay kno%n as the transfer of risks and insurance
res$onsibiities. From the dei!ery terms to the 8ustified
dei!ery achie!ement and ho% the costs %i be aocated
among the $arties are a co!ered in these sets INCOT(RM#
6+7.
II. INCOT(RM# :ROU;# 9ND UTI<ITI(#
There are a tota of +- Internationa Commercia Terms
'INCOT(RM#)& %hich are categorized to four ma8or grou$s
in order of their utiity and com$rehension 6-7=
'i) Group E (Origins Group)
'ii) Group F (Carriage NOT PAID by te !eller)
'iii) Group C (Carriage PAID by te !eller)
'i!) Group D (Arri"al at te !tate# Destination)
From the %arehouse to the destination of the dei!ery& there
are amost +/ miestones or check$oints in the trans$ort
$attern 6.7. For the com$rehension of the merchandise
trans$ort track& the miestones 'in order of the $recedence) are=

'+) $areouse storage at origin
'/) $areouse labor at origin
'-) E%port pac&ing
'>) 'oa#ing at origin
'?) Inlan# (reigt
'.) Port recei"ing carges
'@) For)ar#ers (ee
'A) 'oa#ing on ocean carrier
',) Ocean*Air (reigt cargers
'+0) Cargers at (oreign sipping+port or te airport
'++) Customs, ta%es an# #uties abroa#, an# (inally
'+/) Deli"ery carges to (inal #estination
Be may use these check$oints to anayze the ma2imum e!e
of res$onsibiities for "uyer and #eer in the res$ecti!e
grou$s& to make the understanding and com$rehension of the
res$onsibiities much easier. These terms re a$$icabe for
tangibe goods ony& are ony !aid if they ha!e been agreed
u$on on ceary contractua terms& and ha!e been named in
$urchase agreements& genera $urchase and sae conditions&
orders& order confirmations etc.& or incuded in a se$arate
agreement.
A- Group E
The etter 4(5 is short for E%+$or&s '(2 means 4from5 and
Borks means 4factory or %arehouse5)& %here a named $ace
for shi$ment is a!aiabe to the "uyer& not the #eer. 9nd the
#eer %i not contract for any trans$ortation. The
abbre!iation for this grou$ is E.$ and an added ocation
name is tagged %ith it& for e2am$e& E.$ /asim Port.
The key characteristic of this grou$ is that the #eer
re$resents to make the goods a!aiabe at his o%n $ro$erty& or
his site& to the "uyer. Once the "uyer $icks u$ the goods& the
#eer*s duties and obigations are com$eted and fufied.
Ob!iousy& this grou$ forces the condition %here the #eer has
!ery fe% obigations and has an e2tremey o% e!e risk of
osses and the tite is transferred amost instantaneousy in the
su$$y3chain net%ork. 9most from the beginning& it is the
"uyer %ho utimatey bears the risk of osses and has to co!er
and toerate %ith a the hazards and hurdes of the com$ete
trans$ort. #ome manufacturers aso use the term (23Factory&
%hich is as same as (23Borks.
Using the check$oints abo!e& it is easier to understand no%
that the #eer is res$onsibe from Check$oint C + to
Check$oint C -& and the "uyer is res$onsibe from
Check$oint C > to Check$oint C +/. In some $ractices& it is
common that the #eer oads the goods on truck or the
container %ithout charging the oading feesD Check$oint C >.
0- Group F
The etter 4F5 is short for the %ord Free& and this grou$
incudes terms mentioned here in order of $recedence and
res$onsibiities on #eer&
'i) FCA (Free Carrier)
'ii) FA! (Free Alongsi#e !ip)
'ii) FO0 (Free On+0oar#)
The fundamenta characteristics of this grou$ are that "uyer
and #eer ha!e agreed that the #eer is generay res$onsibe
to dei!er the commodities or goods to a carrier or ocation
designated by the "uyer. 9gain& once the #eer has
effectuated the dei!ery to the s$ecified ocation by the "uyer&
the #eer*s res$onsibiities tend to cease and the "uyer*s
obigations tend to begin.
0- I- FCA (Free Carrier)
The FCA (Free Carrier) is added %ith the name of $oint of
de$arture or oading %ith it& for e2am$e& FCA 'aore.
:eneray& under this term& the dei!ery of goods is conducted
on a truck& a rai3car or container at the s$ecified $oint of
de$arture& %hich are usuay the #eerEs o%n $remises& or a
designated train station or e!en a named cargo termina or into
the custody of the carrier& a at the #eerEs e2$ense. 9sides&
the $oint at origin may or may not be a customs cearance
center. "uyer is res$onsibe for the main carriage or freight&
the freight insurance and other costs and risks associated.
#ome manufacturers aso use the terms FOT (Free On+Truc&)
and FO1 (Free On+1ail).
The FC9 term is further di!ided in to t%o ty$esD one is the
FCA !eller2s Premises& %here the #eer is res$onsibe only for
oading the goods and not res$onsibe for inand freight. This
carries the res$onsibiities of #eer from Check$oint C + to
Check$oint C > ony& and the "uyer has obigations from
Check$oint C ? to Check$oint C +/. The second FC9 term is
FCA Name# Place 'Internationa Carrier) %here the #eer is
res$onsibe for the Inand Freight. This carries the
res$onsibiities of #eer from Check$oint C + to Check$oint C
?& and the "uyer*s obigations from Check$oint C . to
Check$oint C +/.
0- II- FA! (Free Alongsi#e !ip)
The FA! (Free Alongsi#e !ip) is added %ith the named $ort
of origin& for e2am$e& FA! 3araci. This term is $o$uar for
the Fbreak3buk shi$ments* and %ith the im$orting countries
using their o%n !esses. The F9# term re1uires the #eer to
cear the goods for e2$ort& %hich is a turnaround or a re!ersa
from $re!ious $ractices mentioned here. :oods are $aced in
the dock shack or at the side of the shi$& on the dock or ighter&
%ithin the reach of its oading e1ui$ment so that they can be
oaded aboard the shi$& a at the #eerEs e2$ense. "uyer is
res$onsibe for the oading fee& main freight and shi$ment
charges& cargo and goods insurance& and a other costs and
concerning risks associated.
9ccordingy to the INCOT(RM# /000& the #eer %as
res$onsibe from the Check$oint C + to Check$oint C .& the
;ort Recei!ing Charges& or Termina Charges 6?7. Recenty& in
INCOT(RM# /0+0& the #eer is res$onsibe from the
Check$oint C + to Check$oint C @& u$ ti the for%arder*s fee&
%hich %as the obigation for the buyer in INCOT(RM# /0+0
6.7. No% the "uyer has obigations from Check$oint C A to
Check$oint C +/. The Deli"ery is accom$ished once the
goods are handed o!er to the "uyer*s For%arder for insurance
and trans$ortation.
0- III- FO0 (Free On+0oar#)
The FO0 (Free On+0oar#) is added %ith the named $ort of
origin& the oading container or !esse& at the #eer*s e2$ense&
for e2am$e FO0 !ingapore. Under the rues of INCOT(RM#
+,,0 on%ards& the FO" term is s$ecificay used for ocean
and in3and %ater%ay trans$ortation of goods and $roducts&
and the #eer uses his freight for%arder to mo!e the
commodities to the $ort of designated $ort of origin.
9though the rue is set that FO" be used for %ater%ays
a%ays and ony& many im$orters and e2$orters sti use the
FO" term in case of air freights as %e. North 9merican
e2$orters and im$orters ha!e de!eo$ed some ne% functions&
such as deaing on the o$en account and consignment basis&
using the shi$$ing terms FO0 Origin and FO0 Destination
6>7. The term FO0 Origin coins that the "uyer is res$onsibe
for the freight and other costs $us risks. 9nd the FO0
Destination defines that the #eer is accountabe for freight
and other costs and risks. These terms are not the $art of
INCOT(RM# and shoud a%ays be a!oided in internationa
trades.
9ccordingy to the INCOT(RM# /000& the #eer had
res$onsibiities from Check$oint C + to Check$oint C .& and
aso for Check$oint C A= <oading on the Ocean Carrier& and
the "uyer had res$onsibiities of Check$oint C @= For%arders
fee and then from Check$oint C , to Check$oint C +/. Then in
INCOT(RM# /0+0& the #eer no% has res$onsibiities from
Check$oint C + to Check$oint C A& incuding the Check$oint C
@= For%arder*s fee and the "uyer*s obigations start from
Check$oint C , to Check$oint C +/.
C- Group C
The etter 4C5 is short for the %ord Cost& and this grou$
incudes terms here in order of $recedence and res$onsibiities
on #eer&
'i) CF1 (Cost 4 Freigt)
'ii) CIF (Cost Insurance 4 Freigt)
'iii) CPT (Carriage Pai# To5)
'i!) CIP (Carriage 4 Insurance Pai# To5)
The essentia characteristics of this grou$ing are that the #eer
is obigated for contracting and $aying for the carrying and
mo!ing of goods but has no obigation to bear %ith additiona
costs nor has to bear %ith any sort of risk associated to osses&
once the goods ha!e been shi$$ed.
C- I- CF1 (Cost 4 Freigt)
The CF1 (Cost 4 Freigt) is added %ith the named $ort of
destination& at the #eer*s e2$ense& for e2am$e CF1 3araci.
Under the rues of INCOT(RM# +,,0& the term is chiefy
used for ocean freights ony. "ut sti& many $ractice this term
for air cargo trade as %e.
This term refers to%ards t%o distinct and se$arate
res$onsibiitiesD first one is deaing %ith the actua cost of
merchandiseD C, and the other one refers to the freight charges
to a $redetermined destination $ointD F. It is the #eer*s $rime
res$onsibiity under this term to ac1uire the goods from their
door to the $ort of target& and dei!ery is com$eted at this
time. It is then the "uyerEs res$onsibiity to co!er insurance
from the $ort of origin or $ort of shi$ment ti his !ery o%n
door. ;ro!ided that the #eer is res$onsibe for trans$ortation&
the #eer aso chooses the for%arder under the rues.
In this term of CFR& the #eer has res$onsibiities from
Check$oint C + to Check$oint C ,& and the "uyer has
obigations from Check$oint C +0 to Check$oint C +/.
C- II- CIF (Cost Insurance 4 Freigt)
The CIF (Cost Insurance 4 Freigt) is added %ith the named
$ort of destination at the #eer*s e2$ense& for e2am$e& CIF
Dubai. Under the rues of INCOT(RM# +,,0& the term is
$rimariy dedicated for the use of ocean freight and trade& but
as of ike other terms& this term is aso used for air freight
$ur$oses by many traders under the od mind3set. This term is
arranged simiar to the CFR as $re!iousy discussed& but
instead of the "uyer insuring the $roducts for the marine
$hase of the !oyage& the #eer %i assure the goods and
$roducts. Bith this understanding and agreement& the #eer
usuay chooses his o%n for%arder& and the dei!ery is
accom$ished at the $ort of destination.
In this term of CIF& the #eer has res$onsibiities from
Check$oint C + to Check$oint C ,& and the "uyer has his
obigations started from Check$oint C +0 to Check$oint C +/.
C- III- CPT (Carriage Pai# To5)
The CPT (Carriage Pai# To5) is added %ith named $ace of
destination 'discharge) at the #eer*s e2$ense& for e2am$e
CPT 6anattan. In C;T transactions& the #eer has the same
obigations found %ith the term CIF& in addition that the #eer
has to buy freight insurance& naming the "uyer as the insured
%hie the goods are in transit.
The term of C;T is configured to ad8ust res$onsibiities of
#eer from Check$oint C + to the Check$oint C +0& and the
"uyer has obigations from Check$oint C ++ to Check$oint C
+/.
C- I7- CIP (Carriage 4 Insurance Pai# To5)
The CIP (Carriage 4 Insurance Pai# To5) is added %ith the
named $ace of destination at the #eer*s e2$ense& for
e2am$e CIP 'os Angeles. This term is $rimariy used for
muti3mode trans$ort& because it reies on the carrierEs
insurance. The #eer is ony re1uired to $urchase minimum
co!erage. Bhen this $articuar agreement is in sight& the
freight for%arders often act in conse1uence& as the carriers.
The "uyerEs insurance is effectua %hen the goods are turned
o!er to the For%arder.
The term of CI; co!ers the res$onsibiities of #eer from
Check$oint C + to the Check$oint C +0& and the "uyer has
obigations from Check$oint C ++ to Check$oint C +/. The
"uyer has res$onsibiities for customs& duties and ta2es and a
the dei!ery charges at the fina destination.
D- Group D
The etter 4D5 is short for the %ord Deli"ery*Deli"ere#& and
this grou$ incudes terms mentioned here in order of
$recedence and res$onsibiities on #eerD
'i) DAF (Deli"ery+At+Frontier)
'ii) DE! (Deli"ere# E%+!ip)
'iii) DE/ (Deli"ere# E%+/uay)
'i!) DD8 (Deli"ere# Duty 8npai#)
'!) DDP (Deli"ere# Duty Pai#)
This grou$ing is e2acty the o$$osite of the Group E. In
other %ords& the #eer has a the obigations of costs& risks&
insurance& duties etc. and must make the merchandise
a!aiabe at the named $ace of destination& %hich is usuay
named by the "uyer and may aso be the "uyer*s factory.
D- I- DAF (Deli"ery+At+Frontier)
The DAF (Deli"ery+At+Frontier) is added %ith the s$ecified
named $oint at the border& a at the #eer*s e2$ense& for
e2am$e DAF 9ong 3ong. In this term& the #eerEs
res$onsibiity is to em$oy a for%arder to take goods to a
named border ine& %hich is usuay a border3crossing $oint&
and cear them for e2$ort and the dei!ery occurs at that !ery
time. The "uyerEs res$onsibiity is to arrange %ith their
for%arder for the $icku$ of the goods after they are ceared for
e2$ort& carry them across the border& cear them for
im$ortation and cause the dei!ery. In most cases& the buyerEs
for%arder handes the task of acce$ting the goods at the border
across the foreign soi.
In this term& the #eer has his res$onsibiities from
Check$oint C + to Check$oint C +0& and the "uyer has
obigations from Check$oint C ++ and Check$oint C +/.
D-II- DE! (Deli"ere# E%+!ip)
The DE! (Deli"ere# E%+!ip) is added %ith the named $ort of
destination at the #eer*s e2$ense& for e2am$e DE! Osa&a-
In this ty$e of transaction& it is the #eerEs res$onsibiity to get
the goods to the $ort of destination or to engage the for%arder
to the mo!e cargo to the $ort of the destination uncear. 9ny
destination charges that occur after the shi$ is docked are the
"uyerEs res$onsibiity.
In this term& the #eer has res$onsibiities from Check$oint C
+ to Check$oint C ,& and the "uyer has res$onsibiities from
Check$oint C +0 to Check$oint C +/.
D- III- DE/ (Deli"ere# E%+/uay)
The DE/ (Deli"ere# E%+/uay) is added %ith the named $ort
of destination at the #eer*s e2$ense& for e2am$e DE/
0ang&o&- In this ty$e of transaction& the "uyer is res$onsibe
for duties and charges& and the #eer is res$onsibe for
dei!ering the goods to the 1uay 'dock)& %harf 'anding stage)
or $ort of destination. In a re!ersa of D(# $ractice& the "uyer
has to arrange for customs cearance aso.
In this transaction& the #eer has res$onsibiities from
Check$oint C + to Check$oint C +0& and the "uyer has
obigations from Check$oint C ++ to Check$oint C +/.
D- I7- DD8 (Deli"ere# Duty 8npai#)
The DD8 (Deli"ere# Duty 8npai#) is added %ith the named
$oint of destination& often the $ro8ect site or the "uyer*s
$remises& at the #eer*s e2$ense& for e2am$e DD8
7ancou"er. In this INCOT(RM& the #eer is res$onsibe for
most of the e2$enses& %hich incude the cargo insurance&
im$ort customs cearance& and $ayment of customs duties and
ta2es at the buyerEs end. The seer may o$t not to insure the
goods at his o%n risks.
In this term& the #eer has res$onsibiities from Check$oint C
+ to Check$oint C +0 and aso for Check$oint C +/= Dei!ery
Charges to Fina Destination. The "uyer has ony the
res$onsibiity for Check$oint C ++= Customs& Duties and Ta2es
9broad.
D- 7- DDP (Deli"ere# Duty Pai#)
The DDP (Deli"ery Duty Pai#) is added %ith the named $oint
of destination& %hich is again the $ro8ect site or "uyer*s
$remises& for e2am$e DDP 0u:umbura. The DD; terms tend
to be used in intermoda or courier3ty$e shi$ments. The #eer
is res$onsibe for deaing %ith a the tasks in!o!ed in mo!ing
goods from the manufacturing $ant to the "uyer*s door. It is
the #eerEs res$onsibiity to insure the goods and absorb a
costs and risks incuding the $ayment of duty and fees.
In this term of transaction& the #eer has a the
res$onsibiities from Check$oint C + to Check$oint C +/.
III. INT(RN9TION9< T(RM# OF ;9GM(NT
There are four basic Internationa Terms of ;ayment& based on
the methods of $ayment& the time of $ayment and the risks
associated %ith them to either #eer or the "uyer=
'i) Cas in A#"ance (No 1is& to !eller)
'ii) 'etter o( Cre#it ('*C)
'iii) Dra(ts
'i!) Open Account (No 1is& to 0uyer)
Bhene!er Internationa Terms of ;ayment are estabished& it is
necessary to consut the $ersona financia ad!isor or the
banker and shi$$er to determine and anayze the best& suitabe
o$tion %ith benefits.
A- Cas in A#"ance
The "uyer $ays the cash before the shi$ment is made& and
goods are a!aiabe to the "uyer after the $ayment. In this
mode of $ayment& there is no risk associated to the #eer& but
com$ete set of risks associated %ith the "uyer& because he
reies on the #eer that the goods are shi$$ed as e2acty
e2$ected& ordered and 1uoted.
0- 'etter o( Cre#it ('*C)
<etters of Credit re1uire tota accuracy in conforming to
terms& conditions& and documentation. There is a Confirmed
and Unconfirmed Irre!ocabe Credit& ty$es of <HC. In the
Confirmed Irre!ocabe Credit& the $ayment is made after the
shi$ment and the documents are then $resented to the bank.
The #eer must take serious note that the Commercia In!oice
must match the <HC e2actyD the dates must be carefuy
headed and& as it is mentioned in ega anguage& the I#taeI
documents are intoerabe for coection. The Confirmed
Irre!ocabe Credit $ro!ides the seer a doube assurance of
$ayments& and he aso de$ends on the terms of the etter of
credit. This ty$e assures the "uyer that the shi$ment is made&
but he reies on e2$orter to shi$ goods as described in
documents. The Decision Terms can be negotiated and
ackno%edged $rior to making an <HC agreement& mitigating
the "uyerEs degree of risk. In the case of Unconfirmed
Irre!ocabe Credit& the #eer has a singe bank assurance of
$ayment and remains de$endent on o!erseas bank. It is
recommended that the #eer shoud contact his banker to
reso!e %hether the issuing bank has ade1uate assets& as much
enough to co!er the amount.
C- Dra(ts
9 draft may $erha$s be %ritten %ith $racticay any term or
condition agreeabe to both the $arties in!o!ed in
merchandise. Bhen determining the draft*s terms and
conditions& it is necessary for both the $arties to consut %ith
their banker and freight for%arder to agree on the most
ad!antageous means of doing trade in a s$ecified country. 9
draft can be a coection too used to barter $ossession and tite
to merchandise for $ayment. #eer is fundamentay dra%ing
a check against the bank account of the "uyer. 9nd it is
necessary that the "uyerEs bank must ha!e a $re3a$$ro!a& or
must seek a$$ro!a of the "uyer $rior to honoring the check.
There are t%o kinds of draftsD !igt Dra(ts and Time Dra(ts. In
#ight Drafts& the $ayment is made to the #eer once the draft
is $resented to "uyer& and the "uyer recei!es his goods once
he $ays at the bank. For the #eer& if the draft is not
$ri!ieged& then the goods must be returned or resod and the
storage& handing& and arri!a freight e2$enses may aso be
ac1uired. The Time Drafts are characterized so as that the
$ayment is made to the #eer once the draft reaches its
maturity.
D- Open Account
9n o$en3account is usuay agreed u$on by an In!oice& by the
#eer and the "uyer& and the shi$ment and goods are recei!ed
by the "uyer before $ayment. This $ayment method can $ut
the #eer in too dee$ risks as he has to com$etey rey on the
"uyer to $ay the account as $er agreement. 9 terms the
genera of $ayment& incuding the e2tra3charges and terms
shoud be mutuay understood and agreed u$on $rior to an
o$en3account initiation. It is im$ortant that the #eer must
measure and confirm not ony the "uyerEs credit reiabiity but
aso the countryEs accaim as %e.
IJ. DIFF(R(NC( OF TK( CONTR9CT 9ND
TK( INCOT(RM#
The difference bet%een the INCOT(RM# and a contract is of
high significance& as many may confuse these terms to be
some sort of a contract. INCOT(RM# are ony a means of
communication and a unit of conciiation bet%een the t%o
$arties in!o!ed in the e2change& it is not a contract. To be
e!en cearer& these terms do not com$ose a contract bet%een
the "uyer and the #eer. (!en if there is a condition that the
t%o $arties ha!e no contractua conformity bet%een them&
they can sti 8ointy consent on INCOT(RM# and these terms
do not ascertain a ega binding bet%een the t%o as a com$ete
contract. Instead& the t%o $arties ha!e to set u$ a se$arate
contract for the sae3$urchase transaction bet%een the t%o&
and $art of the obigations and understandings of those $arties&
based u$on this com$etey se$arate contract& are $ersonified
in INCOT(RM#& forming the ega binding no%.
In the case of dis$ute and confict bet%een the $arties& the
con!entiona courts a%ays consider #aes Contract initiay& if
there is any a!aiabe& and after that they consider the Course
of ;erformance& the Course of Deaing and then the Industry
#tandards a$$icabe. #ome additiona factors are aso
generay considered that either %hich $erson has the
$ossession& %hether the $ayment has been made or not and
%hich INCOT(RM#& among the set& ha!e been utiized for
trade. It is cear that INCOT(RM# are not the contract and are
not the ega definition and %i ne!er& on their o%n& define the
intent of the $arties. They neither define the contractua rights&
nor the iabiities andHor obigations bet%een the $arties.
J. CONC<U#ION
The ma8or& and the ony& $ur$ose of INCOT(RM# is to
$roduce an internationay standardized set of reguations
go!erning the understanding of the most commony used
contractua terms in o!erseas trade agreements and saes
contracts of mo!abe& tangibe goods ony. INCOT(RM# do
not s$ecify the trans$ort detais regarding the transfer and
dei!ery of the $roducts& and most im$ortanty& INCOT(RM#
are not iabe to $rotect a $arty from his o%n risk of oss.
R(FR(NC(#
6+7. Roth& Biiam J. Lr. and Roth& Biiam J. III&
4INCOTERMS: Facilitating Trade in the Asian
Pacific;& +,,@& Lourna of Internationa (conomic <a%&
Uni!ersity of ;ennsy!ania& Jo. C A& No. C -
6/7. Ramberg& Lan& 4CISG and INCOTERMS 2 in
C!nnecti!n "ith Internati!nal C!##ercial
Transacti!ns5& /00A& #haring Internationa Commercia
<a% across Nationa "oundaries& #immons M Kis
;ubishing '/00A)& -,>3>0-
6-7. UND; ;ractice :uide& 4Shi$$ing and INCOTERMS5&
/00A& UND; ;ractice #eries& United Nations
De!eo$ment ;rogram '%%%.und$.orgH$rocurement)
6>7. (2$ort De$artment& 4Internati!nal C!##ercial Ter#s
%INCOTERMS&5& (2$ort ,++ '%%%.e2$ort,++.com)
6?7. I"T :uide& 4INCOT(RM# /000 C Chart of
Res$onsibiity5& I"T :uide to INCOT(RM# /000&
'%%%.i3b3t.netHincoterms)
6.7. #NGM9RT& 4INCOT(RM# /0+05& #NGM9RT
BOR<DBID( '%%%.skymart%ord%ide.com)