The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goodsClick here to read the extract of Inco Terms 2020, easily explained.


Inco Terms 2020 do not deal with:

 Incoterms are not contract of sale as they are rules.  It has to be made as a part of sale of contract by mentioning specifically in the sale contract between buyer and seller, say  “The terms of delivery mentioned in this sale contract is subjected to  Incoterms 2020”.

The Inco terms does not play the role of specification of goods selling.  The quality of goods or specification of goods  selling  has to be clearly mentioned in the sale agreement between buyer and seller, say in the Purchase order, Letter of Credit or separately  as a Sale contract preferable.

Incoterms also does not cover the payment related rules.  The time of payment, Place of payment, method of payment or currency of payment are not dealt with International Commercial Terms.

Inco Terms 2020 also does not cover the remedies which can be sought for breach of the contract of sale.  Any dispute between importer and exporter (buyer and seller) has to be sorted out separately with Court of Law or Arbitration.

According to ICC, the International Commercial Terms 2020  (Inco terms 2020) does not handle most consequences of delay and other breaches in the performance of contractual obligations.  For example, under DDP terms, the risk of delivering goods to the buyer’s place is with Buyer.  However, it does not mean that the risk in delay under customs clearance at port of destination is at seller’s side, unless otherwise stated in sale contract.  Because, the delay in  statutory obligations under Customs clearance  does not come under Inco Terms, thereby need to separately state in sale contract between buyer and seller.

Also the Incoterms 2020 are rules and don’t deal with the effect of sanctions;  the imposition of tariffs; export or import prohibitions;  force majeure or hardship; intellectual property rights; or  the method, venue, or law of dispute resolution in case of such breach.


Most importantly, it must be stressed that the Incoterms 2020 rules do not deal with the transfer of property/ title/ownership of the goods sold.


In order to avoid problems and disputes later, the parties need to make specific provision by incorporating in their contract of sale neither do the Incoterms rules provide the law applicable to the contract. There may be legal regimes which apply to the contract, whether international, like the Convention on the International Sale of Goods (CISG); or domestic mandatory law relating. 

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goodsClick here to read the extract of Inco Terms 2020, easily explained.

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