The most commonly known trade terms regarding the international commerce is Incoterm. These terms have become an important part of the daily language of trade. Incoterms are published by the International Chamber of Commerce (ICC) and it includes details like the time and place of delivery and who has to pay the costs of freight and insurance. Nevertheless, the Incoterms do not replace a bill of sale, they are rather an addition to it. By using Incoterm, both exporters and importers can agree about the conditions of importing goods and which parts of this process must be carried out from whom. It is more likely to be an agreement about general aspects of the selling/buying process so all little details do not have to be discussed every time a legal transaction is realized. It makes the agreements with your suppliers much easier, using 3 letters which can describe complex conditions which can often be misunderstood or misleading or it would at least make some discussions necessary consequently the whole process is much more time-consuming. There is a huge number of different Incoterms, all consisting of 3 letters. Which of these terms are important for your business really depends but here you can find the ICC’s homepage with these terms and now one example from their webpage:
Incoterm – for example: Ex Works
“Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e.,works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.