INCOTERM Meaning and
Definition
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An Incoterm refers to a set of internationally recognized trade rules and terms developed by the International Chamber of Commerce (ICC). These terms are commonly used in international contracts of sale to define the responsibilities and obligations between buyer and seller regarding the delivery of goods, transfer of risks, and allocation of costs during the transaction process.
The purpose of Incoterms is to establish a clear framework for international trade by providing concise and uniform definitions for various aspects of the transaction. They are crucial in determining each party's rights and obligations and help to minimize misunderstandings and disputes between trading partners operating in different countries.
Incoterms are divided into groups based on different modes of transport, such as sea, land, air, or multimodal, which includes multiple modes. Each Incoterm within a specific group defines a specific set of conditions, such as the point of delivery, the division of transportation and insurance costs, as well as the transfer of risks and obligations. Some commonly used Incoterms include EXW (Ex Works), FOB (Free on Board), CIF (Cost, Insurance and Freight), and DDP (Delivered Duty Paid), each with distinct implications and requirements.
Understanding Incoterms is essential for businesses engaged in international trade as they enable parties to negotiate contracts more effectively, ensure compliance with legal and regulatory requirements, and accurately determine the total cost of a transaction from the beginning to the final destination.
Common Misspellings for INCOTERM
- uncoterm
- jncoterm
- kncoterm
- oncoterm
- 9ncoterm
- 8ncoterm
- ibcoterm
- imcoterm
- ijcoterm
- ihcoterm
- inxoterm
- invoterm
- infoterm
- indoterm
- inciterm
- inckterm
- inclterm
- incpterm
- inc0term
- inc9term
Etymology of INCOTERM
The word "incoterm" is a combination of two words: "inco" and "term".
The term "inco" originated from the Latin word "incohare", which means "to begin". Over time, it evolved into the word "incommodus" in Medieval Latin, which means "inconvenient" or "unsuitable". Eventually, it transformed into the Latin word "incoatus", meaning "commenced" or "started". The prefix "inco-" is used to indicate the beginning or initial stage of something.
The word "term" comes from the Latin word "terminus", which means "boundary" or "limit". It refers to a specified period or condition within which something is intended to take place.
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