What Do Incoterms Not Cover?

Incoterms are a set of standard trade rules that define the obligations of buyers and sellers. However, it is important to note that there are certain aspects that Incoterms do not cover. These include aspects related to the transfer of ownership of goods, payment terms, and the resolution of disputes.

Key Areas Not Covered by Incoterms

Transfer of Ownership

The transfer of title to the goods is typically outlined in the sales contracts and not covered by Incoterms. This is a crucial aspect that needs to be explicitly addressed in the sales contract.

Quality and Quantity

The quality and quantity of the goods being traded are covered by separate quality control and inspection procedures, rather than by Incoterms. These aspects require specific agreements between the buyer and seller.

Payment Terms

Payment terms and currency exchange rates used in the transaction are usually negotiated separately between the buyer and seller, and are not covered by Incoterms.

Regulatory Compliance

Regulatory compliance requirements such as import/export regulations, licenses, or permits, are typically the responsibility of the buyer or seller depending on the terms of the sales contracts, and are not covered by Incoterms.