In international trade there is a set of rules that facilitate the understanding of the scope of the clauses of the contract of sale. They are called Inco-terms and, since their inception in 1936, have been used by both importers and exporters. There are different classifications for grouping the different types of Inco-term.
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The way to classify the different types of Inco-term that exist are very varied. For example, if the criterion of the means of transport used to carry out the transfer of the goods is met, there are two large groups:
- Goods transported by sea or river: FAS, FOB, CIF and CFR.
- Goods transported by any means: EXW, CIP, CPT, FCA, DAP, DAT and DDP.
If the variable that is considered to classify the types of Inco-term is the responsibility of the exporter, it would be necessary to start with the Incoterm of the one with the least number of obligations derived for him, EXW and end by the one that demands him most: DDP. Between them, from minor to greater responsibility for the seller in an international operation would be: FCA, FAS, FOB, CFR, CPT, CIF, CIP, DAT and DAP. It is common, however, that the criterion applicable to the classification of these international rules is that of the agreed place for the delivery of the goods. According to this factor, two large groups (delivery at departure or delivery on arrival) can be distinguished, each of which is subdivided into sections according to the individual characteristics defined by each of the Inco-terms contained therein. For example, in the case of Inco-terms that involve goods traveling at the importer’s own risk, i.e. when a delivery of the goods occurs directly at the time of departure, there are two types of Inco-term:
- EXW: The product is made available to the buyer already in the exporter’s premises, at the factory.
- FCA, FAS, FOB, CFR, CIF, CPT and CIP: the importer assumes costs and risks in everything related to the transport of the goods from the moment the transport company receives the goods already under conditions suitable for dispatch.
Where the contract occurs under the conditions less favorable to the seller, that is, in cases where the delivery of the goods does not take place until the arrival at destination, it will be the latter who assumes the cost and risks of transport and what entails until it is reached the point agreed by contract for delivery. In these circumstances one can talk about two different assumptions:
- DAP: the seller must bear all the costs and responsibilities involving the assuming ownership of the contracted goods until the time when the landing of the goods occurs at the agreed port.
- DAT and DDP: The exporter retains responsibility for the goods until they reach the destination point and not before.