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What are Incoterms?
Contractual terms developed by the International
Chamber of Commerce (ICC) in Paris
A standard three-letter abbreviated terminology
Translated into various languages
Covers thirteen main options
The purpose is to clearly describe the key
obligations of sellers, buyers and carriers with
regard to:
Incoterms

Delivery of the Goods
Transfer of Risks
Transfer of Costs

ITC

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...
2-2

Incoterms: There are 4 groups
The E group:
 The carriage is arranged by the buyer
 Risks & costs are transferred to the buyer when the goods are
made available

The F group:
 The carriage is arranged by the buyer
 Risks & costs are transferred to the buyer as from just after export
clearance

The C group:
 The carriage is arranged by the seller
 Risks are transferred to the buyer just after export clearance
but costs are on the seller up to import clearance at named destination

The D group:
 The carriage is arranged by the seller
 Risks are transferred just before import clearance but costs are on the
seller up to import clearance when duty is unpaid or including import
clearance when duty is paid
...
2-3

The 13 Incoterms:
Group E - Departure
EXW “EX WORKS” (…named place)
The seller delivers when he places the goods at
the disposal of the buyer at the seller’s premises
or another named location (I
...
, works, factory,
warehouse, etc
...

Mode of transport: Any mode

ITC

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2-1

Delivery Ex-Works (EXW)
Based on the Incoterms definition of the Ex Works
term, is Lemunge & Sons liable to as the price as
claimed by Fibro A/S?

Who bears the risk for the damage caused to the
goods by the fire?

ITC

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...
named place)
The seller delivers the goods, cleared for export, to the carrier
nominated by the buyer at the named place
...

If delivery occurs at any other place, the seller is not
responsible for loading from its own vehicles
...
2-6

Group F - Main carriage not paid by seller
2) FAS “FREE ALONGSIDE SHIP” (…named port of shipment)

The seller delivers when the goods (cleared for
export) are placed alongside the vessel at the
named port of shipment
...


Mode of Transport: Maritime and
inland waterway only
ITC

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...

The buyer has to bear all costs and risks of loss of
or damage to the goods from that point
...

Mode of Transport: Maritime
and inland waterway only

ITC

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2-2

Delivery FOB
Who bears the risk of such loss under the
Incoterms?

Who bears the risk if the thef occurs on the night
of 8 to 9 May?

Can Fibro A/S, having delivered the goods to the
port of Copenhagen and otherwise performed its
obligations, collect payment under the letter-ofcredit?
ITC

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2-2 (Cont’d)

Delivery FOB
What would be a reasonable way of handling the
described situation, assuming that the Tanzania
National Shipping Line is not unable to designate a
vessel but simply delayed temporarily in doing so?

What would be the responsibility of Lemunge &
Sons ’ forwarding agent, Fixit Transports, in a
situation of this kind?

ITC

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