Incoterms describe the practical arrangements for the sale and movement of goods between a seller and a buyer. The correct Incoterm agreed upon between the two parties will determine:
- Where the goods will be delivered
- Who is responsible for arranging the transportation
- Which party is responsible for insuring the goods
- Who handles any customs procedures and pays any related duties and taxes.
What do Incoterms not cover?
Whilst Incoterms cover a range of areas around the arrangements between a buyer and seller, they do not cover:
- Price of the goods
- Specify the type of goods
- The time, place, method, or currency of payment
- Provide remedies in event of a contract breach
- Provide guidance regarding force majeure
- Transfer of ownership of goods.
Read our comprehensive guide to Incoterms article with lots more information, important actions businesses need to take and links to further support.