Incoterms

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What are Incoterms and how they are useful to trade?

Incoterms is the short form of International Commercial Terms that are widely accepted international rules crystallizing the obligations, costs and risks involved in delivery of goods. The terms of delivery are efficiently standardized through Incoterms and their use in international sales contracts gives certainty to parties.

Incoterms were first developed and published by the International Chamber of Commerce (ICC) in 1923. Since then several revisions have taken place. The latest and current version is Incoterms 2010. To keep pace with the ever-evolving global trade landscape, the latest update to the trade terms is currently in progress and is set to be unveiled in 2020.

The 2010 version has eleven rules or definitions, seven (Ex-W, FCA, CPT, CIP, DAT, DAP and DDP) of which apply to any mode or all modes of transport and remaining four (FAS, FOB, CFT and CIF) that apply to sea and inland waterway transport. Incoterms cover ‘who, what and when’ of international sales and delivery. They help determine :

  • What are the obligations of the seller and the buyer
  • What costs the seller bears and what costs the buyer bears
  • When and how does the property pass from the seller to the buyer
  • When does the risk in goods pass from the seller to the buyer

Thus the set of terms in the Incoterms help prevent misunderstandings in international trade by standardizing and defining the terms to be used in the contracts. By merely incorporating any of the Incoterms the obligations, costs and risks are determined without ambiguity. This helps the contracting parties to discharge their obligations and bear the costs without any uncertainty.

The Incoterms do not cover details of payment obligations, vessel requirements, termination, insolvency etc. They do not constitute a complete contract of sales. Yet they are incorporated by express mention in most international contracts. Most domestic contracts also use same or similar (e.g. FOR - short form for Free on Road) terms.

The Incoterms make it easy to draft international sales contracts in goods. So, essentially, the Incoterms are used by trading firms or companies, especially importers and exporters. The Incoterms are not used for buying or selling services. Even so, the Incoterms are also used increasingly by marine and multimodal transport businesses, logistics firms/companies, banks that deal with letters of credit and even financial service providers funding trading firms/companies, who incorporate the terms to specify the obligations of the buyers and sellers.

The latest version Incoterms 2010 takes into account various developments in international trade such as increased concerns on cargo security, changes in the standard insurance clauses, increased use of electronic records or documents, obligations to exchange cargo related information, new developments in logistics trade, new practices in containerization and point to point trade, movement of goods within trading blocks, sales in transit and spread of customs free zones.

So, all parties engaged in international trade should be conversant with the Incoterms and incorporate them in their contracts.

Incoterms 2010 - Ex-W (Ex-Works)

In an Ex-Works Contract, the seller’s prime obligation is to deliver the goods by placing the goods at the disposal of the buyer at any named place within the agreed period or date and give the buyer suitable notice (by electronic means or otherwise) to enable him take delivery of the goods. The seller bears all the costs and risks till the goods are delivered to the agreed point of disposal.

It must be noted that Ex-Works does not mean delivery at the factory of the buyer. It means delivery at the named place, which maybe the seller’s premises, works, factory or warehouse or any other named place but within the country of exportation.

The seller has no obligation to load the goods on any collecting vehicle nor does he need to clear the goods through the Customs for export. If the buyer asks the seller to load the goods, the seller may do so at the expense and risk of the buyer. If the seller does not want to do so, he must give the buyer notice of his refusal.

The seller must provide the buyer with all necessary documents such as commercial invoice and any official authorisations requested by the buyer for clearances through the customs or for any cargo security reasons or for transport of goods to the destination.

The seller need not take out insurance for carriage beyond the point of delivery. However, he must give necessary information to the buyer to enable him take out insurance.

The seller must provide packaging for the goods in a manner appropriate for transport and as agreed. Packages must be marked appropriately. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

The buyer’s prime obligation is to take delivery of the goods at the named place upon (i.e. within reasonable time of) receipt of notice from the seller that the goods are placed at his disposal at the named place and pay the seller the agreed price for the goods against delivery or as agreed. He is obliged to give the seller proof of delivery as agreed.

All the costs and risks pass to the buyer upon delivery of the goods. The buyer bears any additional costs, such as insurance, storage etc. for delay in taking delivery of the goods as agreed. The costs of transport and insurance upon delivery of the goods must be borne by the buyer. All duties and taxes and costs of clearance through the customs, including any pre-shipment inspection (after delivery) etc. must also be borne by the buyer.

Generally speaking, Ex-Works contracts are resorted to when the buyer has a contract with his own logistics service provider (usually a multimodal transport operator) to pick up the cargo on his behalf from the named place, make arrangements for inland transportation and customs clearance in the exporting country and cross-border transportation of goods from there.

Incoterms 2010 - FOB (Free On Board)

‘Free On Board’ means that the seller delivers the goods by placing them on board the vessel nominated by the buyer at the named port of shipment or by procuring the goods so delivered on the agreed date or within the agreed period, in the manner customary at the port.

The seller must bear all costs and risks relating to the goods till the goods have been delivered. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer that the goods have been delivered or that the vessel has not arrived or taken delivery within the agreed time.

The seller has no obligation to enter into a contract of carriage with the carrier. He may, if requested by the buyer or if it is the commercial practice and nothing to the contrary is instructed by the buyer in due time, contact for carriage on usual terms at the risk and expense of the buyer. In that case, he must give despatch details and transport document, usually a bill of lading, to the seller through any convenient or agreed means. If the buyer requests the seller to make a contract of carriage but the seller does not want to do so, he must give notice of his refusal to do so to the buyer. Where no vessel is nominated, the seller may choose any vessel appropriate for the cargo and voyage.

The seller must provide the buyer with necessary proof that the goods have been delivered on board the vessel. If the proof is not a transport document, the seller, at the buyer’s request, risk and expense, must provide necessary assistance to the buyer in obtaining the transport document.

The seller need not take out insurance but he must provide the buyer necessary information to enable the latter take out insurance. If the buyer specifically requests, the seller may take out insurance at the cost and risk of the buyer.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed.. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to notify the seller the name of the vessel and loading point at the named port within sufficient time to enable the seller deliver the goods. He should select the time within the agreed delivery period when the vessel will take delivery at the named port. He should accept the delivery as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods. The buyer bears any additional costs, such as insurance, storage etc. if the nominated vessel fails to arrive in time or the vessel fails to take the goods or closes for delivery of the cargo earlier than the time agreed by the buyer with the seller for delivery of goods.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

FOB should be used for transportation by sea or inland waterways only. For other modes of transport, FCA is more appropriate.

Incoterms 2010 - FCA (Free Carrier)

‘Free Carrier’ means that the seller delivers the goods to the carrier or another person nominated by the buyer at the agreed point, if any, at the named place on the agreed date or within the agreed period. The delivery may be before customs clearance for export or after. This must be clearly spelt out in the contract.

The seller must bear all costs and risks relating to the goods till the goods have been delivered to the carrier or named person. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export.

The seller has no obligation to enter into a contract of carriage with the carrier. He may, if requested by the buyer or nothing to the contrary is instructed by the buyer, contact for carriage on usual terms at the risk and expense of the buyer. In that case, he must give despatch details and transport document to the seller through any convenient means. If the buyer requests the seller to make a contract of carriage but the seller does not want to do so, he must give notice of his refusal to do so to the buyer.

Delivery is complete when the goods are placed at the disposal of the carrier or nominated person. However, if the named place is the seller’s premises, the delivery is complete when the goods have been loaded on the means of transport provided by the buyer. The property and risks pass to the buyer upon delivery.

The seller need not take out insurance but he must provide the buyer necessary information to enable the latter take out insurance. If the buyer specifically requests, the seller may take out insurance at the cost and risk of the buyer.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed.. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to notify the seller the name of the carrier or nominated person within sufficient time to enable the seller deliver the goods. He should select the time within the agreed delivery period when the carrier or nominated person will take delivery. He should notify the seller the mode of transport to be used by the nominated person and the point of taking delivery within the named place. He should accept the delivery as agreed and pay the seller the agreed price for the goods against delivery or as agreed. All the costs and risks pass to the buyer upon delivery of the goods. The buyer bears any additional costs, such as insurance, storage etc. for delay in taking delivery of the goods or failing to nominate a carrier/person in time or failure of the person/vehicle to take delivery of the cargo in time, as agreed.

Where applicable and agreed, all duties and taxes and costs of clearance through the customs, including any pre-shipment inspection (after delivery) etc. must also be borne by the buyer.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

Normally, FCA (and not FOB) should be used for air consignments where airfreight and insurance are to be borne by the buyer.

Incoterms 2010 - CFR (Cost and Freight)

‘Cost and Freight’ means that the seller delivers by placing the goods on board the vessel at the named port of shipment or by procuring the goods so delivered on the agreed date or within the agreed period, in the manner customary at the port.

The seller must bear all costs and risks relating to the goods till the goods have been delivered, the costs of loading, the freight (which may include the cost of unloading at the destination port) and the cost of obtaining the transport document and sending it to the buyer. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer so that the buyer can take measures normally required to take the goods.

The seller must enter into a contract of carriage with the carrier from the place of delivery to the port of destination. The contract must be on usual terms for carriage by the usual route in a vessel of the type usually used for transport of the type of goods sold. He must give despatch details and transport document, usually a bill of lading, to the seller through any convenient or agreed means without any delay. The transport document must show the contracted goods and be dated within the agreed period of shipment. It must be so made out or endorsed as to enable the buyer claim the goods from the carriers at the port of destination or sell the goods in transit to another buyer by transfer of the transport document or notification to the carrier. Where no vessel is nominated, the seller may choose any vessel appropriate for the cargo and voyage.

The seller need not take out insurance but he must provide the buyer necessary information to enable the latter take out insurance. If the buyer specifically requests, the seller may take out insurance at the cost and risk of the buyer.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed.. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to accept the delivery and transport document as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods, including all costs relating to the goods from the time they have been delivered, while the goods are in transit or payable upon their arrival at the destination port for unloading (not covered under contact of carriage), lighterage and wharfage etc.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

‘CFR…. Named port of destination’, should be used for transportation by sea or inland waterways only. For other modes of transport, CPT is more appropriate. Usage of C&F should be avoided.

Incoterms 2010 - CIF (Cost Insurance and Freight)

‘Cost, Insurance and Freight’ means that the seller delivers by placing the goods on board the vessel at the named port of shipment or by procuring the goods so delivered on the agreed date or within the agreed period, in the manner customary at the port.

The seller must bear all costs and risks relating to the goods till the goods have been delivered, the costs of loading, the freight (which may include the cost of unloading at the destination port), the cost of insurance cover against risk of loss of or damage to the cargo during carriage and the cost of obtaining the transport document and insurance policy and sending them to the buyer. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer so that the buyer can take measures normally required to claim the goods from the carriers.

The seller must enter into a contract of carriage with the carrier from the place of delivery to the port of destination. The contract must be on usual terms for carriage by the usual route in a vessel of the type usually used for transport of the type of goods sold. He must give despatch details and transport document, usually a bill of lading, to the seller through any convenient or agreed means without any delay. The transport document must show the contracted goods and be dated within the agreed period of shipment. It must be so made out or endorsed as to enable the buyer claim the goods from the carriers at the port of destination or sell the goods in transit to another buyer by transfer of the transport document or notification to the carrier. Where no vessel is nominated, the seller may choose any vessel appropriate for the cargo and voyage.

The seller must obtain cargo marine insurance for minimum cover as per clause (C) of Institute Cargo Clauses or equivalent with any underwriter or Insurance Company of repute and so endorse that the buyer or any person having insurable interest in the goods can enforce any claim. Insurance must be for 110% of CIF value. At buyer’s request and expense, the cover may be for higher value and/or for any additional risks such as Clauses (A) and (B) of institute Cargo Clauses, Institute War Clauses, Institute Strike, Riots and Civil Commotion Clause etc. At buyer’s request and expense, the seller must give any information the buyer may need for procuring any additional insurance.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to accept the delivery and transport/insurance documents as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods, including all costs relating to the goods from the time they have been delivered, while the goods are in transit or payable upon their arrival at the destination port, lighterage and wharfage etc.

CIF…. Named port of destination’, should be used for transportation by sea or inland waterways only. For other modes of transport, CIP is more appropriate.

Incoterms - FAS (Free Alongside Ship)

‘Free Alongside Ship’ means that the seller delivers the goods by placing the goods alongside the vessel (e.g. on a quay or a barge) nominated by the buyer at the loading point indicated by the buyer, if any, at named port of shipment or by procuring the goods so delivered on the agreed date or within the agreed period, in the manner customary at the port.

The seller must bear all costs and risks relating to the goods till the goods have been delivered and where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer that the goods have been delivered or that the vessel has not taken delivery within the agreed time.

The seller has no obligation to enter into a contract of carriage with the carrier. He may, if requested by the buyer or if it is the commercial practice and nothing to the contrary is instructed by the buyer in due time, contact for carriage on usual terms at the risk and expense of the buyer. In that case, he must give despatch details and transport document to the seller through any convenient or agreed means. If the buyer requests the seller to make a contract of carriage but the seller does not want to do so, he must give notice of his refusal to do so to the buyer.

The seller must provide the buyer with necessary proof that the goods have been delivered alongside the ship. If the proof is not a transport document, the seller, at the buyer’s request, risk and expense, must provide necessary assistance to the buyer in obtaining the transport document.

The seller need not take out insurance but he must provide the buyer necessary information to enable the latter take out insurance. If the buyer specifically requests, the seller may take out insurance at the cost and risk of the buyer.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed.. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to notify the seller the name of the vessel and loading point at the named port within sufficient time to enable the seller deliver the goods. He should select the time within the agreed delivery period when the vessel will take delivery at the named place. He should accept the delivery as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods. The buyer bears any additional costs, such as insurance, storage etc. for delay in taking delivery of the goods or if the vessel fails to arrive in time or the vessel fails to take the goods or closes for delivery of the cargo earlier than the time agreed by the buyer with the seller for delivery of goods.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

FAS should be used for sea consignments where sea freight, cost of loading and insurance are to be borne by the buyer.

Incoterms 2010 - CIP (Carriage and Insurance Paid To)

‘Carriage and Insurance Paid To’’ means that the seller delivers the goods to the carrier or any nominated person at the agreed place on the agreed date or within the agreed period.

The seller must bear all costs and risks relating to the goods till the goods have been so delivered, the costs of loading, the freight (which may include the charges for unloading at the destination as per contract of carriage) and cost of insurance. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer so that the buyer can take measures normally required to take the goods.

The seller must contract or procure a contract of carriage with the carrier from the agreed point of delivery to the named place of destination. The contract must be on usual terms for carriage by the usual route. He must give despatch details and transport document to the buyer through any convenient or agreed means without any delay. The transport document must show the contracted goods and be dated within the agreed period of shipment. Where necessary, it must be so endorsed as to enable the buyer claim the goods from the carriers at the port of destination or sell the goods in transit to another buyer by transfer of the transport document or notification to the carrier. Where the transport document is negotiable and issued in several originals, full set of originals must be furnished to the buyer.

The seller must take out cargo marine insurance for minimum cover as per clause (C) of Institute Cargo Clauses or equivalent with any underwriter or Insurance Company of repute and so endorse it that the buyer or any person having insurable interest in the goods can enforce any claim. Insurance must be for 110% of CIF value. At buyer’s request and expense, the cover may be for higher value and/or for any additional risks such as Clauses (A) and (B) of institute Cargo Clauses, Institute War Clauses, Institute Strike, Riots and Civil Commotion Clause etc. At buyer’s request and expense, the seller must give any information the buyer may need for procuring any additional insurance.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to accept the delivery as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the risks pass to the buyer upon delivery of the goods, including all costs relating to the goods from the time they have been delivered, while the goods are in transit or payable upon their arrival at the destination port for unloading (not covered under contact of carriage), lighterage and wharfage etc.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

‘CIP…. Named place of destination’, can be used for any mode of transportation, including multimodal transport. Also, wherever the buyer relieves the seller from the obligation to provide a bill of lading (even for transport by water), the term CIP must be used.

Incoterms 2010 - CPT (Carriage Paid To)

‘Carriage Paid To’’ means that the seller delivers the goods to the carrier or any nominated person at the agreed place on the agreed date or within the agreed period.

The seller must bear all costs and risks relating to the goods till the goods have been so delivered, the costs of loading and the freight (which may include the charges for unloading at the destination as per contract of carriage). Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller must give sufficient notice to the buyer so that the buyer can take measures normally required to take the goods.

The seller must contract or procure a contract of carriage with the carrier from the agreed point of delivery to the named place of destination. The contract must be on usual terms for carriage by the usual route. He must give despatch details and transport document to the buyer through any convenient or agreed means without any delay. The transport document must show the contracted goods and be dated within the agreed period of shipment. Where necessary, it must be so endorsed as to enable the buyer claim the goods from the carriers at the port of destination or sell the goods in transit to another buyer by transfer of the transport document or notification to the carrier. Where the transport document is negotiable and issued in several originals, full set of originals must be furnished to the buyer.

The seller need not take out insurance but he must provide the buyer necessary information to enable the latter take out insurance.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to accept the delivery as agreed and pay the seller the agreed price for the goods against delivery or as agreed.

All the risks pass to the buyer upon delivery of the goods, including all costs relating to the goods from the time they have been delivered, while the goods are in transit or payable upon their arrival at the destination port for unloading (not covered under contact of carriage), lighterage and wharfage etc.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

‘CPT…. Named port of destination’, can be used for any mode of transportation, including multimodal transport. Also, wherever the buyer relieves the seller from the obligation to provide a bill of lading (even for transport by water), the term CPT must be used.

Incoterms 2010 - DAT (Delivered At Terminal)

‘Delivered At Terminal’ means that the seller delivers when the goods once unloaded from the arriving means of transport, are placed at the disposal of the buyer at the p0int named in the terminal at the named port or place of destination within the agreed period. ‘Terminal’ includes any place, quay, warehouse, container yard or rail, road or air cargo terminal.

The seller must bear all costs and risks relating to the goods till the goods have been so delivered, the costs of loading, the cost of transportation, the cost of unloading at the destination. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller has no obligation to clear the goods through Customs at the port or place of destination but he must give sufficient notice to the buyer so that the buyer can take measures normally required to take delivery of the goods.

The seller must contract for the carriage of goods to the named terminal at the agreed port or place of destination. If a specific terminal is not agreed or is not determined by practice, the seller may select the terminal at the port or place of destination that best suits its purpose.

The seller has no obligation to insure the cargo but it is in his own interest to take out insurance to cover damage to the cargo during voyage, unloading of the goods at the named terminal and storage till the buyer takes delivery of the goods.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to take the delivery of the goods when it receives notice of delivery from the buyer and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods, including all costs relating to carrying out the formalities of clearance of the goods through the Customs, from the time they have been delivered.

Incoterms 2010 - DDP (Delivery Duty Paid)

‘Delivery Duty Paid’ means that the seller delivers when the goods are placed at the disposal of the buyer cleared for import on the arriving means of transport ready for unloading at the named place of destination on the agreed date or within the agreed period.

The seller must bear all costs and risks relating to the goods till the goods have been so delivered, the costs of loading and the cost of transportation. Where applicable, the seller must clear the goods through the Customs for export and import at his own expense and bear the duties, taxes and other charges payable for export and import and also obtain, at his own expense, any export and import license and other official authorisation for customs clearance for export and import. The seller must give sufficient notice to the buyer so that the buyer can take measures normally required to take delivery of the goods.

The seller must contract for the carriage of goods to the agreed point at the named place of destination. Any The costs for transport through any other third country prior to delivery must be borne by the seller.

The seller has no obligation to insure the cargo but it is in his own interest to take out insurance to cover damage to the cargo till the buyer takes delivery of the goods.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The seller must reimburse the buyer for any costs incurred in providing any assistance for obtaining documents or for obtaining documents unless the contract specifies that such charges are covered in the price.

The buyer’s prime obligation is to take the delivery of the goods when he receives notice of delivery from the buyer and pay the seller the agreed price for the goods against delivery or as agreed.

The buyer provide the seller any assistance for obtaining any documents necessary for clearance of goods through the Customs

All the costs and risks pass to the buyer upon delivery of the goods. The buyer also has to bear any costs or risks for any failure or delay in taking delivery of the goods once the buyer’s notice of delivery is received.

Incoterms 2010 – DAP – (Delivered At Place)

‘Delivered At Place’ - means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the agreed point, if any, at the named place of destination on the agreed date or within the agreed period.

The seller must bear all costs and risks relating to the goods till the goods have been so delivered, the costs of loading and the cost of transportation till the goods reach the destination and any unloading charges that are to seller’s account as per the contract. Where applicable, the seller must clear the goods through the Customs for export at his own expense and bear the duties, taxes and other charges payable for export and also obtain, at his own expense, any export license and other official authorisation for customs clearance for export. The seller has no obligation to clear the goods through Customs at the port or place of destination but he must give sufficient notice to the buyer and any document so that the buyer can take measures normally required to take delivery of the goods.

The seller must contract for the carriage of goods to the named terminal at the agreed port or place of destination. If a specific terminal is not agreed or is not determined by practice, the seller may select the terminal at the port or place of destination that best suits its purpose.

The seller has no obligation to insure the cargo but it is in his own interest to take out insurance to cover damage to the cargo during voyage, unloading of the goods at the named place of destination.

The seller must provide packaging for the goods in a manner appropriate for transport and mark them as agreed. Any costs of checking quality, measuring, weighing and counting etc. prior to delivery must be borne by the seller.

The buyer’s prime obligation is to take the delivery of the goods when he receives notice of delivery and/or necessary document from the seller and pay the seller the agreed price for the goods against delivery or as agreed.

All the costs and risks pass to the buyer upon delivery of the goods, including all costs relating to carrying out the formalities of clearance of the goods through the Customs, from the time they have been delivered.

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