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Can you think of any ‘Incoterms’? What is FOB? CIF?

A glossary of terms used in international trade published by the International Chamber of Commerce in Paris. It gives precise definitions to eliminate misunderstandings between traders in different countries. Incoterms-2000 includes 13 conditions, divided into four groups:

E-conditions (E-terms) – the conditions under which a manufacturer releases the goods by EX from the seller's premises;

F-terms (F-terms) – the conditions under which the manufacturer is obliged to deliver the goods to the carrier nominated by the buyer;

C-conditions (C-terms) – the conditions under which the seller arranges and pays for transportation, but is not liable for damage to the goods after shipment and dispatch;

D-conditions (D-terms) – the conditions under which the seller must deliver the goods to the destination specified by the buyer.

 

Incoterms are terms concerning transport and insurance costs. They used in international trade contracts. FOB and CIF are two of the most common used ones.

CIF (Costs, Insurance, Freight): the price includes cost of the goods, insurance and freight (transport)


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