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Incoterms® and Commercial Contracts

Incoterms® Rules
International Model Contracts

Incoterms® 2020 Rules


The Incoterms® rules explain a set of eleven of the most commonly-used three-letter trade terms, e.g. CIF, DAP, etc., reflecting business-to-business practice in contracts for the sale and purchase of goods.

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Incoterms® Rules

Standard trade terms for contracts for the sale of goods

The Incoterms® rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade.

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What are the Incoterms® rules?

The Incoterms® rules are standard 'trade terms' used in international and domestic sale contracts to allocate certain costs and risks between the seller and the buyer... read more »

How are the Incoterms® rules properly used?

The Incoterms® rules can be incorporated into contracts by simple reference... read more »

Where do you find the Incoterms® rules?

The Incoterms® rules are found in international sale contracts and any of the common documents that may evidence such contracts... read more »

Who is bound by the Incoterms® rules?

The Incoterms® rules govern certain responsibilities between the seller and the buyer under the contract of sale... read more »

Why should importers and exporters use and understand the Incoterms® rules in detail?

What would happen if a trader forgot to use the Incoterms® rules, or failed to understand the allocation of risks/ obligations thereunder? ... read more »

Commercial Contracts / Model Contracts

The ICC Commission on Commercial Law and Practice (CLP) develops ICC model contracts and ICC model clauses which give parties a neutral framework for their contractual relationships.


For example traders may wish to rely on a single contract that is specifically adapted to export instead of exchanging the form documents (the pro forma invoice or purchase order) approach. In such cases, a model contract (such as the ICC Model International Sale Contract) may be useful.

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How to use a Model Contract?

As is

One way to use the model contract is to use it "as is". The trader simply fills in the spaces provided for specifying the contract details: buyer/seller, description of goods, price, payment method, delivery and dispute resolution (among others).

As reference

Another option is to use the model contract as a source of inspiration or reference document when drafting the firm's standard forms or general conditions.

As a negotiating tool

Yet another option is to use the model contract as a negotiating tool.
When one party presents a clause that is difficult or objectionable to the other, reference to the more balanced approach in the model contract may help the parties to reach a compromise.

Trading Internationally

Books on business, contracting and trading internationally

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