Rohit Pareek (31)
Prashna Bhattarai (32)

Introduction
Universally recognised set of definitions of
international trade terms
Recognised by courts and other authorities
Define the trade contract responsibilities and
liabilities between buyer and seller
Updated regularly to keep pace with changes and
developments in international trade

Introduction
Devised an published by
the ICC
WBO ICC introduced
Incoterms in 1936
Incoterms 2012
EXW- Ex Works
FCA- Free Carrier
FAS- Free Alongside Ship
FOB- Free On Board
CFR- Cost and Freight
CIF- Cost, Insurance and Freight
CPT- Carriage Paid To
CIP- Carriage and Insurance Paid To
DDP- Delivered Duty Paid
DAP: Delivery At Place

Introduction
Purpose of Incoterms
Designed for Parties to a Contract
Provides a set of international rules for foreign trade
Reduces uncertainties
Avoids different interpretations in different countries
Additional costs and time can be avoided

Introduction
Limitation
• To rights and obligations of the parties to contract of sale
with respect to the delivery of the goods sold.
• Do not deal with the consequences of breach of contract
• Primarily intended for use where goods are sold for
delivery across national boundaries, hence international
commercial terms.
• Can be used in contracts for sale of goods directly.

Types of Incoterms:
1) Ex-works: Goods available only at seller’s premises.
Buyer: loads the goods on truck or container at the
seller’s premises, and takes into account the
subsequent costs and risks.
2) Free Carrier (FCA):
Buyer: main carriage/freight, cargo insurance and other
costs and risks.

Types of Incoterms:
3)Free Alongside Ship (FAS):
Seller: places the goods alongside the ship at the named
port, loaded at his expense.
Buyer: pays loading fee, main carriage/freight, cargo
insurance and other costs risks.
4) Free on Board (FOB):
Delivery of goods on board the vessel at the port of
origin is at the seller’s expense.
Buyer is responsible for loading fee, main carriage/
freight, cargo insurance and other costs risks.

Types of Incoterms:
5) Cost and Freight (CFR):
Seller: pays the costs and freight to bring the goods to the port
of destination.
Risk transferred once the goods have crossed the ship’s rail.
6) Cost Insurance and Freight (CIF):
Used exactly the same way as CFR except that
Seller: must in addition procure and pay for insurance for the
cargo insurance and delivery of goods to the port of
destination
Buyer: responsible for the import customs clearance & other
costs and risks

Types of Incoterms:
7) Carriage Paid To (CPT):
Seller delivers the goods at the named place of destination
at his expense.
Buyer assumes the cargo insurance, import customs
clearance, payment of customs duties and taxes, and other
costs and risks.
8) Carriage and Insurance Paid To (CIP):
Seller delivers the goods on the ship. On board, the risk is
transferred to the buyer.
Buyer is accountable for the import customs clearance,
payment of customs duties and taxes, and other costs and
risks until goods reach their final destination.

Types of Incoterms:
9) Delivery Duty Paid (DDP):
Seller is responsible for most of the expenses and
it is a “door to door” delivery. Risk is transferred when the
goods are delivered.
10) Delivery at Place (DAP):
Seller pays for carriage to the named place, except for
costs related to import clearance.