Today, business is not only the leading structure of the world economy, but also occupies a major place in the distribution of products on world markets. To resolve various difficulties, disputes and conflicts arising in the process of international sales, the basic conditions for the supply, exchange and sale of products were developed.
What are the basic conditions
The basic conditions for the supply of goods are internationally recognized trade rules that determine the nature and content of trade transactions. The basis (basis) of such contracts is the formation of the price of the goods, which includes the cost of transport costs for the delivery of products. With the increase in international sales, contractual documents that did not have certain universally recognized drafting standards and did not contain mutually beneficial conditions for the delivery and acceptance of goods were sources of ever-increasing costly disputes between the countries participating in the trade transaction. Trading concepts were interpreted by the buyer and seller differently.
To resolve the constantly emerging disagreements, the International Chamber of Commerce in 1936 developed the “International Rules” explaining the meaning of trade terms. Various changes and amendments have been made to this document over time. Currently, it is valid in the 2000 edition under the name Incoterms and reflects the current practice of international trade.
Reasons for the revision of Incoterms
What caused the need for additions and amendments to the terminology of trade between states? Have the basic terms of delivery of products changed from this?
One of the reasons is the rapid growth over the short period of implementation in various fields of activity (including trade) of various electronic devices for communication, as well as the processing and transmission of documentation. The use of faxes, telexes, the Internet network has significantly accelerated the processing and forwarding of trading accounts, transport accompanying documents, invoices, etc.
And also there have been changes in the ways of transporting goods. As a result of the application of rationalization innovations, such types of loading became available as horizontal, mixed unloading and loading, transportation using containers.
The new edition of Incoterms clarified controversial terms and facilitated the understanding and reading of those contained in the document earlier. A completely different method of presentation was used. All explanations and conditions are recommendations.
Specification of the term "basic conditions of delivery." Detailed review
In the new statement of 2000, the basic conditions for the supply of goods at the conclusion of a foreign trade contract of sale determine more specifically the moment of transfer of products to the buyer's property. Now, on both sides, the most accurate accounting of the risks of accidental damage or loss of cargo has become possible.
The obligations of both parties are specified. Separately indicated are both the obligations of the seller and the buyer. Two meanings of the term “delivery” have been clarified. In the first case, the seller’s obligations to complete it are reflected, and in the second, the buyer’s obligations to accept it.
Now, the buyer and seller at the conclusion of the contract must specify whether they apply the basic terms of delivery in full or with some reservations. The priority choice in determining the conditions remains with the buyer.
A competent approach to the right of first-priority decision determines the entire further course of the international trade transaction and its benefit, which will be the greatest if negotiations can be conducted so that the processing of documents and delivery of goods to foreign countries is paid and organized by a foreign counterparty.