Name: Trương Việt Cường

Student’s code: 1813340012

Class: TMAE302.1

HOMEWORK

1. What is incoterms from different approaches?

We all know that Incoterms or “International Commercial Terms” represents for a very useful way
of communication and it’s actually aimed at reducing confusion between buyers and sellers.
Incoterm defines a transaction between importer and exporter, so that both parties understand the
tasks, costs, risks and responsibilities, as well as the logistics and transportation management from
the exit of the product to the reception by the importing country. Incoterms are all the effective ways
of distributing responsibilities and obligations between two parties. It is vital for buyer and seller to
know about the responsibilities and obligations for transport of the goods.
There are currently 11 incoterms in use. Their commonality in trading contracts makes it important
for you to understand what they mean and the responsibilities of the various involved parties.

2. Why is it useful in international sales of goods:

● As they stand today, there are 11 main terms and a number of secondary terms that help buyers and
sellers communicate the provisions of a contract in a clearer way; therefore, reducing the risk of
misinterpretation by one of the parties.
● Incoterms govern everything from transportation costs, insurance to liabilities. They contribute to
answering questions such as “When will the delivery be completed?” “What are the modalities and
conditions for transportation?” and “How do you ensure one party that the other has met the
established standards? Having said that, it is important to remember that there are also limits to
Incoterms. For example, they do not apply to contractual rights and obligations that do not have to
do with deliveries. Neither do they define solutions for breach of contract.

3. Why are there different versions of Incoterms?

Currently, there are 11 different Incoterms. Each type is divided into four groups: E, F, C and D. These
categories are determined by the delivery location and who is responsible for covering the cost of each
part of the journey. The groups are then split into sub-categories which refer to various scenarios. When
choosing an Incoterm, buyers and sellers should thoroughly review each Incoterm and decide which set
of terms best suit them and their shipment.