Incoterms stand for International commercial terms. It is a set of rules that are aimed at standardizing delivery contracts at the international level. Incoterms unify information about all obligations and rights of contracting parties, it also includes a glossary of standardized terms that enable sellers and buyers from different countries to literally speak the same tonguе.

Incoterms regulate the following aspects:

  • distribution of expenses between the parties, whereby it is determined which expenses will rest with the seller and the point when they will begin to rest with the buyer;
  • transfer of risks as a result of the loss of or damage to cargo from the consignor to the consignee;
  • delivery date, i.e. the exact point in time when an order is transferred to the consignee or to its representative.

The series of rules are reviewed once in a decade in order to reflect the reality of modern commercial trade. Thus, presently, Incoterms 2010 are in use. It is mandatory to specify that it is the case, when one communicates with a contracting party, and to also check documents for references to the applicable version of the aforementioned rules. Otherwise, one may have to face problems if their partner is guided by an older version of Incoterms.