Incoterms or international commerce terms is a series of international sales terms that is widely used throughout the world, divides transaction costs and responsibilities between buy and seller, reflects state of the art transportation practices and closely corresponds to the U.N. Convention on Contracts for the International Sale of Goods.
Incoterms deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Incoterms are always used with a geographical location and do not deal with transfer of title.
They are devised and published by the International Chamber of Commerce (ICC). The English text is the original and official version of Incoterms 2000, which have been endorsed by the United Nations Commission on International Trade Law (UNCITRAL). Authorized translations into 31 languages are available from ICC national committees.
The Incoterms were drafted for the first time in 1936 by the International Chamber of Commerce (CCI / ICC) in order to homogenise / standardise the vocabulary in the trade and exchange and thus avoid the legal disputes between sellers and buyers.
This is the Incoterm which is very much used in practice for, it tends to divide the expenses and risks in a fair manner.
DDU is a new Incoterm which is very much offered in trade and strengthens the position of the seller, for, the merchandise is transported at the risk and expense of the seller upto the premises of the buyer.
INCOTERMS are the work of the International Chamber of Commerce and are available in their full form through the ICC's publication, "INCOTERMS2000".
All INCOTERMS must be expressed by the appropriate three-letter code and include the naming of a physical place of handover and - in certain cases - the further naming of the carrier or Vessel.
Under INCOTERMS2000, risk and responsibility pass from the seller to the buyer when the cargo is made available on the ground at the 'works', at or on the agreed future date or future time, uncleared through customs.
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