Incoterms is the official ICC collection of conventions developed for the interpretation of trace clauses which makes the accomplishment of international trade easier. Any reference in the sale-purchase agreement made to Incoterms 2000 explicitly defines the obligations of the Parties and moderates the risk of legal complications.
Purpose and Subject of Incoterms
Purpose of the Incoterms is to collect international regulations that are used to interpret international trade conditions. This allows for the reduction or elimination of uncertainty resulting from the different interpretation of trade conditions in various countries. When concluding a specific agreement, it has to be determined exactly which version (year) of INCOTERMS shall apply to the agreement. It is important that exporters and importers take into account that the various agreements required for the accomplishment of international trade transactions are dependent on each other since sale-purchase agreement is not the only agreement needed but there are also freight forwarding, insurance financing, etc. contract amongst which Incoterms applies to only one, the sale-purchase agreement.
Clauses of Incoterms define:
– cargo parity;
– place of execution,
– liability, obligations and rights of the seller and buyer.
Cargo parity:
– Delivery obligations of the seller and payment and acceptance obligations of the buyer
– Packaging costs
– Notification obligation of the Parties
Place of Execution:
Single-point clauses (Group E, F, D): Costs and risks pass over on the very same topographical position.
Two-point clauses (Group C): Costs and risks pass over on different topographical position.
Multimodal clauses: They can be applied to any type of cargo.
Issues governed by Incoterms:
– cargo parity;
– place of execution,
– liability, obligations and rights of the seller and buyer.
the geographical point where transportation-related costs pass over from the seller to the buyer. 
