Notes on using Incoterms

When learning, learning and applying about Incoterms, almost everyone suffers from a common disease of only reading the main conditions without paying attention to the use of Incoterms. This led to occasional contractual mistakes, such as the year Incoterms was not written.

1. Incoterms are not laws

Incoterms are commercial practices, not laws, so the rules are not binding.

Therefore, buyers and sellers do not have to comply with Incoterms, if they do not choose one of these rules as a contract.

Only when the seller and the buyer agree to use certain rules in Incoterms and put into the sale contract, then the content of the applicable rules will be binding.

Những lưu ý khi sử dụng Incoterms

Once agreed to apply, the parties to the transaction must be responsible and accountable for these rules.

Incoterms only explain the most common problems associated with delivery. As for which party is obliged to rent a vehicle or buy insurance, when does the seller deliver the goods to the buyer and divides the cost to the parties.

But other issues such as price, payment method, loading, unloading, unloading of goods, storage, storage are subject to the agreement of the parties shown in the contract or according to customary port, custom business activities and practices of the host countries.

2. The validity of previous versions

Incoterms has many versions, the later versions do not negate the validity of the previous versions. Therefore, when using it, it is necessary to specify which version of Incoterms to apply to compare and determine the responsibilities of the parties.

Những lưu ý khi sử dụng Incoterms

Some previous versions of Incoterms were released in 1936, 1953 (amended in 1967 and 1976), 1980, 1990, 2000, and 2010.

If you forget to mention the version of Incoterms used in the contracting process, it can cause a lot of trouble for reconciling and verifying the validity of the terms of the contract.

3. Accurate reference to the Incoterms rule

As mentioned above, Incoterms has many versions. So if you want to apply the Incoterms rules of the year to the contract of sale of goods, you must make that clear in the contract by using words like the following form:

[Selected condition, venue name, Incoterms 2010]

2 parties may increase or decrease their responsibilities and obligations to each other depending on the strong position (weak) in the transaction. But do not change the nature of the delivery facility conditions. The increase and decrease of responsibilities and obligations (if any) need to be specified in the sale and purchase contract.

4. Incoterms only determine the time of moving goods risk

Incoterms only determine when the risk of moving the goods from the buyer to the seller will be determined. Not specify the time of transfer of goods ownership, as well as the consequences of a breach of contract.

Những lưu ý khi sử dụng Incoterms

These issues are often specified in other terms of the contract or contract governing law.

5. Legal value

Many Import and Export newcomers depend on the rules of Incoterms and forget the laws of the country or territory involved in the trade. It may be due to not knowing the nature of Incoterms or having little experience and flexibility in applying.

The parties also need to be aware that applicable local laws may invalidate any content of the contract. Including the Incoterms condition previously selected. Therefore, the parties need to research and must comply with local laws in the process of negotiating and executing sales contracts.

6. Scope of use

Incoterms really bring about positive effects on international trade activities. It provides buyers and sellers with rules that can be referenced and consistently applied in negotiation and contracting, just like a common language.

Những lưu ý khi sử dụng Incoterms

Depending on the goods being transported by air (air, sea, road, ...), the type (bulk cargoes, containers, barges, ...), there are corresponding groups of conditions.

However, as stated, it is essential to know what Incoterms are so as not to interfere with the process of negotiating and executing international trade transactions.

Source of article: advantage.vn/en/nhung-luu-y-khi-su-dung-incoterms

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