Incoterms

AAA

DEFINITION of 'Incoterms'

Trade terms published by the International Chamber of Commerce (ICC) that are commonly used in both international and domestic trade contracts. Incoterms, short for "International Commercial Terms," are used to make international trade easier by helping traders in different countries understand one another. Incoterms were first developed in 1936 and are updated from time to time, in order to conform to current trade practices. Because of these updates, contracts should specify which version of Incoterms they are using (e.g., Incoterms 2010).

INVESTOPEDIA EXPLAINS 'Incoterms'

Trade terms used in different countries may appear identical on the surface, but actually have different meanings as they are used domestically. Incoterms are internationally recognized and thus help to prevent confusion in terms of foreign trade contracts, by helping sellers and buyers understand their obligations in any transaction. Examples of Incoterms include "DAT" (Delivered at Terminal), "DDP" (Delivered Duty Paid) and "CIF" (Cost, Insurance and Freight).

RELATED TERMS
  1. Continuous Bond

    A financial guarantee commonly used in international trade that ...
  2. Cost and Freight - CFR

    A trade term requiring the seller to arrange for the carriage ...
  3. Cost, Insurance and Freight - CIF

    A trade term requiring the seller to arrange for the carriage ...
  4. Ex Works - EXW

    A trade term requiring the seller to deliver goods at his or ...
  5. Free Alongside - FAS

    A trade term requiring the seller to deliver goods to a named ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named ...
Related Articles
  1. What Is International Trade?
    Personal Finance

    What Is International Trade?

  2. Globalization: Progress Or Profiteering?
    Economics

    Globalization: Progress Or Profiteering?

  3. Do Cheap Imported Goods Cost Americans ...
    Economics

    Do Cheap Imported Goods Cost Americans ...

  4. What Is The World Trade Organization?
    Economics

    What Is The World Trade Organization?

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center