With an estimated 6700 languages, 196 countries, 14 common law systems which have been further developed and applied by each country, it is almost unthinkable to negotiate contracts, with all these obstructions.
Misunderstandings, local practices, different cultural orientation, illegal terms can lead to losses and deadlines being missed. In International Trade there is usually a series of contracts, the purchase agreement, supply agreements, freight agreements and distributing agreements.
If there is non-compliance with the terms of one of the agreements it will certainly have a knock on effect on the other agreements which can lead to claims.
INCOTERMS is a set of uniform terms applicable to all the various types of purchase agreements and shipping agreements, which also serve as a “global language”, understood across cultures and beliefs.
The ICC published the latest version of INCOTERMS “INCOTERMS 2010” on the 1 st of January 2011.