Incoterms is short for "International Commercial Terms" and are standard trade definitions devised and published by the International Chamber of Commerce (ICC). These terms are used in international sales contracts to clearly establish the basis on which the seller will invoice the buyer for goods supplied. Their use in sales contracts act as a form of legal shorthand to clearly identify the responsibilities of both parties.
The ICC introduced the first version of Incoterms in 1936. Since then, ICC expert lawyers and trade practitioners have updated them six times, the most recent being in the year 2010.
Why use Incoterms in International Trade?
There are 11 different Incoterms in terms of the 2010 rules. They have been grouped into 2 categories:
All companies involved in international trade should possess a copy of the ICC's handbook on Incoterms 2010. A copy of the handbook can be purchased from the ICC via their website.
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