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Incoterms provide clarity on the responsibilities of buyers and sellers from "summary" of Modern Law of International Trade by Ajendra Srivastava
Incoterms play a crucial role in international trade by defining the responsibilities of buyers and sellers. These terms provide clarity and help avoid confusion or disputes between parties. By clearly outlining who is responsible for various aspects of the transaction, Incoterms help ensure smooth and efficient trade operations. For example, terms like FOB (Free on Board) specify that the seller is responsible for delivering the goods to the port of shipment and loading them onto the vessel. On the other hand, terms like CIF (Cost, Insurance, and Freight) indicate that the seller is responsible for not only delivering the goods to the port of destination but also arranging for insurance and paying for freight. Understanding these terms is essential for both buyers and sellers to know their obligations and rights in a transaction. By using the appropriate Incoterms, parties can avoid misunderstandings and ensure that the transaction proceeds smoothly. This clarity helps build trust and confidence between the parties, leading to successful trade relationships. In addition to defining responsibilities, Incoterms also address other important aspects of international trade, such as the transfer of risk and the division of costs. By specifying these details, parties can anticipate potential challenges and plan accordingly. This proactive approach can help prevent disputes and delays, ultimately benefiting both buyers and sellers.- Incoterms serve as a valuable tool for all parties involved in international trade. By providing clear and standardized terms, they help streamline transactions, minimize risks, and foster better communication between buyers and sellers. This clarity ultimately contributes to the efficiency and success of international trade operations.
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