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I NTERNAT I ONAL COMMERC I AL LAW
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International Trade Terms are Renewed: Incoterms ® 2010
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1. Purpose and Scope of Incoterms
a) Purpose
The purpose of Incoterms is, as stated by ICC “
to provide a set of
international rules for the interpretation of the most commonly used trade
terms in foreign trade. Thus, the uncertainties of different interpretations
of such terms in different countries can be avoided or at least reduced to a
considerable degree”
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Since international sales contracts are generally realized between the
non-present parties from different nationalities, it is very important how
the parties interpret the terms and the abbreviations commonly used in
foreign trade. By this regulation of Incoterms, at least the confusions and
the differences of interpretation will be overcome and the conflicts arising
out of international trade will be reduced.
b) Scope
The scope of the Incoterms is limited to the rights and obligations of
the parties’ arising from the delivery of the sale of goods. Incoterms do
not define the goods, but the goods should be understood as commodities.
Incoterms do not regulate any contract other than sale contract.
However, even in a sale contract, Incoterms do not cover all the contractual
aspects. The topics that Incoterms govern can be gathered under four groups:
(i) the delivery of goods, (ii) transfer of risks, (iii) division of costs, and
(iv) obligations concerning the documents. Incoterms do not provide rules
for the (i) payment and payment methods, (ii) transfer of ownership, (iii)
variants, (iv) dispute resolution and (v) other issues relating to fulfilment
of the contract.
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Article of October 2010 – Prof. Dr. H. Ercüment Erdem