Incoterms make international trade easier and help traders in different countries to understand one another. These standard trade definitions that are most commonly used in international contracts are protected by ICC copyright.

ICC introduced the first version of Incoterms (short for "International Commercial Terms" ) in 1936. Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with the development of international trade.

Most contracts made after 1 January 2000 will refer to the latest edition of Incoterms, which came into force on that date. The correct reference is to "Incoterms 2000." Unless the parties decide otherwise, earlier versions of Incoterms like Incoterms 1990 are still binding if incorporated in contracts that are unfulfilled and date from before 1 January 2000.

Why Incoterms?

Incoterms are international rules that are accepted by governments, legal authorities and practitioners worldwide for the interpretation of the most commonly used terms in international trade. They either reduce or remove altogether most uncertainties arising from differing interpretations of such terms in different countries.

What do they cover?

The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold, but excluding "intangibles" like computer software.

What are the 13 Incoterms?

Each Incoterm is referred to by a three-letter abbreviation. Here is a complete list, with the meanings spelled out. Click on any of the 13 terms listed below and read a concise definition from the Preambles to Incoterms 2000. Several of the Preambles, marked below with an *, include a footnote referring to the Introduction. Click anywhere on those pages to view the relevant part of the Introduction.

To see a table of Incoterms click here

What does it take to use Incoterms correctly?

ICC recommends that "Incoterms 2000" be referred to specifically whenever the terms are used, together with a location. For example, the term "Delivered at Frontier (DAF)" should always be accompanied by a reference to an exact place and the frontier to which delivery is to be made. To prevent misunderstandings, variations of the three-letter Incoterms should be strictly avoided.

Here are three examples of correct use of Incoterms:

FCA Kuala Lumpur Incoterms 2000

FOB Liverpool Incoterms 2000

DDU Frankfurt Schmidt GmbH Warehouse 4 Incoterms 2000

Why do Incoterms need revising periodically?

The main reason is the need to adapt Incoterms to contemporary commercial practice. For instance, in the 1990 version, the clauses dealing with the seller's obligation to provide proof of delivery allowed paper documentation to be replaced by e-mail for that purpose for the first time.