Incoterms

Strictly Private and

Confidential

Group 6
Instructor: MA. Phm Nguyn Minh Chu
Members:
Nguyn Th Kiu Ly
Dng Th Oanh

Trng Th Tho
Nguyn Qunh Trang
Trn Ngc Trung
Trn Thanh Tng

Outline
Part1: Overview of incoterms
What is incoterms?
Incoterms 2010?
Who uses incoterms?
Part 2
How to cite incoterms in contract
Conflicts between incoterms and contract
Part 3
Notes when using
Practice
Vocabulary

Part 1
Incoterms: stands for
International Commercial
Terms

What is incoterms?

Published by the
International Chamber of
Commerce (ICC)
Latest version (effective Jan
01, 2011): Incoterms 2010

What for?
Widely used in International commercial

transactions or procurement processes

Not used in domestic commerce contract

The Incoterms rules are intended primarily to

clearly communicate the tasks, costs, and risks
associated with the transportation and delivery of
goods, sometimes the payment terms

Incoterms 2010
the eighth set of pre-defined international
contract terms
Defines 11 rules
Down from the 13 rules in the Incoterms 2000

Incoterms 2010

There are 11 main terms, subdivided

into 2 categories

Incoterm
Categories

1. Rules for any mode or modes of

transport
EXW, FCA, CPT, CIP, DAP,
DAT, DDP
2. Rules for Sea and Inland
waterway
FAS, FOB, CFR, CIF

Incoterms
2010

Export

Carriage

customs

to port of

declaration export

Unloading Loading

of truck in on vessel (Sea/Air)

port

of in port of to port of

import

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Buyer

Seller

Seller
Buyer

Buyer

Seller

Seller/

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

CIP

Seller

Seller

Seller

Seller

Seller

Seller

seller

Seller

DAT
Seller

Seller

DAP
Seller

Seller

Seller

Buyer

Buyer/
Buyer/ seller

Seller

Buyer

Seller

CPT

Seller

taxes

Buyer

Seller

Seller

destination clearance

Import

Buyer

Buyer

Seller

to place of customs

Buyer

Seller

import

Import

Buyer

Seller

Seller

in port of

Carriage

Buyer

FCA

Seller

truck

Buyer

Buyer

CIF

in port of

on

import

Buyer

CFR

Insurance

Loading

export

Buyer

FOB

Unloading

export

EXW

FAS

Carriage

Seller

Seller

Seller

Seller

Seller

including

DDP

VAT/FAT

not

Who uses incoterms?

Buyers and sellers

Banks, insurers, arbitrator, judge

Obligatory
Optional
Once incoterms is used, parties are forced to
observe the terms defined in incoterms.

The 3 terms Used Most Often

Free Carrier (FCA)
Carriage Paid To (CPT)
Carriage & Insurance Paid To (CIP)

Part 2

How to cite Incoterms in the contract

Conflict between contract & Incoterms

How to cite Incoterms in the contract?

Make clear in the contract through such
words as:

[the chosen Incoterms rule including the

named place, followed by] -Incoterms

2010

Examples:
EXW Toyota Viet Nam, Vinh Phuc, Viet
Nam- Incoterms 2010

CIP Noi Bai Airport, Viet Nam Incoterms

2010

CIF Hai Phong Port, Viet Nam- Incoterms

2010

Note:
FOB Haiphong or CIF Incoterms 2010

Conflict between contract & Incoterms

Conflict:
The allocation of costs : the exporter and the

buyer agree that some pre-delivery shipping

costs (special insurance, for example) will be to

the account of the buyer. No Incoterm allows

for such arrangement.

Which prevail?
Normally the contract prevails - but
careful contract drafting makes things clear
to both sides and beyond dispute.

Solutions:
Study the regulations of the Incoterms
carefully.
Vary them only when absolutely necessary
Clarify in the contract that your variations take
precedence over Incoterms as defined by the
ICC.
Also state clearly whether they intend to vary
the point at which the risk passes from Seller
to Buyer.

PART 3
Notes in Using Incoterms 2010
Practice
Vocabulary in Chapter 1

NOTES IN USING INCOTERMS 2010

Incorporate the Incoterms 2010 rules into your
contract of sale

Choose appropriate Incoterms rule

Specify your place or port as precisely as
possible

NOTES IN USING INCOTERMS 2010

Incoterms is only applicable to the foreign trade
contract (not to the domestic trade contract)
Incoterms can not replace the international
business contract, it is a part of this.
Remember that Incoterms rules do not give you
a complete contract of sale

Practice 1
Translate into Vietnamese
The goods are delivered Ex-Works. The goods
travel at the clients risk and responsibility. Any
shortage, damage or loss must be signaled at the
moment of collection by the carrier. Based on
your specific needs, you could decide to ask the
carrier in order to collect the goods or to delegate
us to do this for you. Your opinion shall be due
informed to us.

Answer
Hng c giao theo iu kin Giao hng ti xng.
Khch hng s chu mi ri ro v trch nhim i vi
hng ha. Bt c s thiu hng, tn tht, mt mt u
phi c ngi chuyn ch bo ngay khi nhn hng.

Theo nhu cu c th, qu v c th yu cu ngi

chuyn ch nhn hng hoc yu cu chng ti nhn
hng. S la chn ca qu v phi c thng bo kp
thi cho chng ti

Practice 2
Translate into English

Vic giao hng c thc hin theo CIF cng Kobe

(Nht Bn), Incoterms 2010. Ngy giao hng d

nh l ngy 10 thng 10 nm 2013. Ri ro v

quyn s hu i vi hng ha s chuyn t ngi

bn sang ngi mua ngay khi giao hng.

Answer
Delivery of the Goods shall be made CIF, Kobe
Port - Incoterms 2010. The scheduled date of
delivery shall be 10 October 2013. Risk and
title to the Goods shall pass from the Seller to
the Buyer on delivery.

VOCABULARY IN CHAPTER 1
Step 1 : Timing
The date of coming into force
of the contract
Within 90 days of execution

Ngy hp ng c hiu lc

Be null and void

V hiu lc

Performance of any duty

Thc hin bt k ngha v no

A breach of contract

S vi phm hp ng

Terminate the contract

Chm dt hp ng

Pro rata

Theo t l

Liquidated damage

Bi thng thit hi c quy nh trc

If the Seller fail to supply

Nu ngi bn khng cung ng hng

To be liable for

Chu trch nhim

Or any part of week

Hoc theo s ngy thc t giao chm

Trong vng 90 ngy k t ngy k kt

VOCABULARY IN CHAPTER 1
Step 2

Place of delivery

Have liability for the goods

Trch nhim i vi hng ha

Risk and title to the goods

Ri ro v s hu hng ha

A bonded warehouse in the

Kho ngoi quan ti cng

port of

Fulfill delivery obligation

Hon thnh ngha v giao hng

Port of shipment

Cng gi hng

At ones discretion

Theo mun ca

VOCABULARY IN CHAPTER 1
Step 3

Transport

The type of packaging

Loi ng gi

The shipping marks

K m hiu

Improper or defective packing

Vic ng gi khng ph hp
hoc li

Bill of lading is issued

Vn n c pht hnh

Endorse the bill

K hu vn n

Be adequately packaged

c ng gi y

VOCABULARY IN CHAPTER 1
Step 4

Risk, title and Insurance

Keep legal ownership of

goods
The floating policy and
the open cover
Under cumulative
agreements
Tailor-made policy
Be spontaneous
combustion
Pay a claim for loss

Gi quyn s hu hng ha
hp php
Hp ng bo him th ni

Theo nhng tha thun t

trc
Chnh sch thch hp
T bc chy
Tr khon i bi thng
mt mt

VOCABULARY IN CHAPTER 1
Step 5
Standard terms of trade

Terms of Trade: Incoterms 2010

Pass the ships rail

Make a major source of
confusion
The contract provisions
prevail
Take precedence over the
Incoterms
Be on board the vessel
named by

Tiu chun thng mi

Hng qua mn tu
Gy nhiu nhm ln
iu khon hp ng c p
dng (trong trng hp c
xung t gia cc quy nh)
C quyn u tin hn
Incoterms
Trn con tu c ch nh
bi

RECAP
Part1: Overview of incoterms
What is incoterms?
Incoterms 2010?
Who uses incoterms?
Part 2
How to cite incoterms in contract
Conflicts between incoterms and contract
Part 3
Notes when using
Practice
Vocabulary

Thanks for listening!

Time for questions

Q&A