Incoterms are standardized trade terms published by the International Chamber of Commerce. They clarify key responsibilities between seller and buyer, including delivery, transport arrangements, export and import formalities, and the point where risk transfers. They do not replace the complete sales contract.
The 11 Incoterms 2020 rules include EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR and CIF. Some are suitable for any mode of transport, while FAS, FOB, CFR and CIF are designed for sea and inland waterway transport.
FOB means the seller delivers goods on board the nominated vessel at the agreed port, while CFR includes the seller paying freight to the destination port. CIF adds insurance to the seller's obligations. DDP places extensive delivery and import responsibilities on the seller.
Always specify the named place or port and the version used. Use an Incoterm together with clear product, payment, delivery and risk provisions in the sales contract. For legal interpretation, refer to the official ICC publication and professional advice.