{"id":9033,"date":"2026-10-05T11:00:00","date_gmt":"2026-10-05T11:00:00","guid":{"rendered":"https:\/\/internationaltradelaw.org\/new\/?p=9033"},"modified":"2026-10-05T11:00:00","modified_gmt":"2026-10-05T11:00:00","slug":"choosing-the-right-incoterms-rule","status":"publish","type":"post","link":"https:\/\/internationaltradelaw.org\/new\/choosing-the-right-incoterms-rule\/","title":{"rendered":"Choosing the Right Incoterms\u00ae Rule"},"content":{"rendered":"\n

Incoterms® rules, published by the International Chamber of Commerce, allocate costs, risks and tasks between seller and buyer in the delivery of goods. They do not decide when title passes or the price, and they do not replace the sale contract, but choosing the wrong rule is a common source of disputes.<\/p>\n\n\n\n

Infographic<\/p>

The eleven Incoterms® 2020 rules<\/div>
Grouped by mode of transport<\/div><\/figcaption>
Any mode of transport<\/div>
EXW<\/div>
FCA<\/div>
CPT<\/div>
CIP<\/div>
DAP<\/div>
DPU<\/div>
DDP<\/div><\/div>
Sea and inland waterway only<\/div>
FAS<\/div>
FOB<\/div>
CFR<\/div>
CIF<\/div><\/div>
← More obligations on the buyer<\/span>More obligations on the seller →<\/span><\/div>
<\/div><\/figure>\n\n\n\n

Match the rule to the mode of transport<\/h2>\n\n\n\n

Four rules (FAS, FOB, CFR and CIF) are designed for sea and inland waterway transport, where goods are delivered at or on board a vessel. For containerised cargo handed over at an inland depot or terminal, FCA, CPT or CIP are usually the better fit.<\/p>\n\n\n\n

Know where risk passes<\/h2>\n\n\n\n

Under the ‘C’ rules, the seller arranges and pays for main carriage, but risk passes to the buyer much earlier, on delivery to the carrier. Parties often assume the opposite.<\/p>\n\n\n\n

Check insurance obligations<\/h2>\n\n\n\n

Under Incoterms 2020, CIP requires the seller to obtain broader cover (Institute Cargo Clauses (A)), while CIF retains the minimum cover of Clauses (C) unless the parties agree otherwise.<\/p>\n\n\n\n

Align with the letter of credit<\/h2>\n\n\n\n

Where payment is by documentary credit, the chosen rule should match the documents the credit calls for, such as an on-board bill of lading for FOB or CIF.<\/p>\n\n\n\n

Before you agree delivery terms<\/div>