Member Article

Using an Incoterm as a term of delivery (or delivery clause as they are often also

called) means that the parties have agreed, in a simple manner, on the following

important issues:

shipping

during shipping

The eleven different terms which are currently available, apportion liability differently

between the seller and the buyer in these three areas.

Reference to Incoterms minimises the risk of misunderstandings and divergent

perceptions of the delivery terms. In this context, it is worth noting that Incoterms do

not, however, constitute an exhaustive sales contract. Reference to Incoterms will not,

for example, regulate price and payment method or liability for defects.

The ICC has now released an updated version of these terms, use of which is

intended to start from 1 January 2011. These are called Incoterms 2010. It replaces

the previous version, Incoterms 2000. The largest changes involve the introduction of

two new delivery terms and the disappearance of four old ones. The two new terms

are DAT (Delivered At Terminal) and DAP (Delivered At Place).

At the same time we lose DAF (Delivered At Frontier), DES (Delivered Ex Ship),

DEQ (Delivered Ex Quay) and DDU (Delivered Duty Unpaid).

Under the new delivery term DAT delivery takes place at a specified terminal when

the goods are unloaded and placed at the disposal of the buyer. However, under the

new delivery term, DAP, delivery takes place at the named place but instead ready for

unloading.

Both new terms – and the four that disappear – are terms within the “D group”

which is the class in which the seller’s liability is most extensive in that, put simply, the

seller bears the costs and risks until the buyer has received the goods at the specified

place. In addition to the D group, there are the three following groups:

E group

The buyer collects the goods from the seller and risk is transferred when the goods

are placed at the disposal of the buyer by the seller.