i

1-INTRODUCTION

Transportation is an essential component of modern society. It is the means by which

people and goods are moved from one location to another. Transportation is crucial
for the functioning of economies and the mobility of individuals. The development of
transportation has been significant in the history of mankind, and it has contributed
to the evolution of social, economic, and political systems.

The history of transportation can be traced back to prehistoric times when humans
used animals to transport goods. The invention of the wheel in Mesopotamia around
3500 BC marked a significant development in transportation. The wheel led to the
development of carts and wagons, which were used to transport goods over longer
distances. With the advent of the steam engine and the Industrial Revolution,
transportation underwent a significant transformation. Steamships, railroads, and the
internal combustion engine revolutionized transportation, making it faster, more
efficient, and more accessible.

Today, transportation is a vital component of modern society. It is essential for

economic development and is critical in supporting social interactions. The
development of transportation infrastructure has played a significant role in the
growth of urban centers, leading to the formation of cities and towns.
Transportation has also had a profound impact on the environment. The burning of
fossil fuels, used to power many modes of transportation, has contributed to air
pollution and climate change. The increased use of transportation has led to
congestion and increased carbon emissions, leading to adverse effects on the
environment.

Efforts are being made to develop sustainable transportation systems that minimize
environmental impact. Electric cars, mass transit systems, and alternative fuel
vehicles are some of the solutions being developed to address the environmental
impact of transportation.

Maritime trade has a rich and diverse history that spans thousands of years. It is one
of the oldest types of trade in human history and has played an important role in
shaping the world we live in today. The sea has always been a vital means of
transportation and communication, and maritime trade has been central to the
development of human civilization.

Maritime trade began with the discovery of trade routes throughout history. In
ancient times, maritime trade took place between the eastern and western coasts of
the Mediterranean Sea. The Phoenicians, for example, were skilled seafarers who
established a vast maritime trade network throughout the Mediterranean region,
trading in goods such as timber, textiles, and precious metals. The Greeks and
Romans also developed extensive maritime trade networks throughout the
Mediterranean, and by the 4th century BCE, Greek ships had begun to sail as far as
India.

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During the Middle Ages, Islamic trade routes increased maritime trade between the
Arab world and India and Europe. The Arabs established an extensive trade network
in the Indian Ocean, which brought spices, silk, and other goods from India and
Southeast Asia to the Middle East and Europe. Later, with the European discoveries,
trade routes were opened throughout the world and maritime trade increased even
more. European powers such as Portugal, Spain, England, and the Netherlands
established colonies in the Americas, Asia, and Africa, and developed vast maritime
trade networks that linked these colonies to Europe.

Today, maritime trade carries about 90% of world trade. Most of the goods and
services in the world economy are carried out by sea transport. Trade between
countries in the world economy has greatly increased thanks to maritime transport.
Maritime transport is a sector with the potential for economic growth and job
creation. Maritime trade provides links between businesses, suppliers, and
manufacturers and supports many sectors in the world economy.

However, maritime trade also carries environmental risks. Maritime transport

includes the risks of shipwrecks, oil spills, and other environmental disasters. For this
reason, international maritime organizations work to ensure that environmental
sustainability is maintained. The International Maritime Organization (IMO) is the
United Nations agency responsible for the safety and security of shipping and the
prevention of marine pollution by ships. It is responsible for developing and
maintaining the regulatory framework for international shipping, which includes the
International Convention for the Prevention of Pollution from Ships (MARPOL) and
the International Convention for the Safety of Life at Sea (SOLAS).

In addition to environmental concerns, maritime trade has also been a source of

conflict throughout history. The seas have been the site of many battles and wars,
and piracy has been a constant threat to maritime trade. The fight against piracy and
the protection of maritime trade routes have been major concerns for governments
and international organizations throughout history.

Despite these challenges, maritime trade has played an important role in the
development of trade throughout history and is an indispensable sector for the world
economy today. The growth of maritime trade has led to increased economic growth
and job creation, and has helped to create a more interconnected and globalized
world.

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Incoterms, or International Commercial Terms, are a set of standardized trade terms
used in international commercial transactions. They were first introduced by the
International Chamber of Commerce (ICC) in 1936 and have been updated several
times since then, with the latest version released in 2020.
The purpose of Incoterms is to provide a common set of rules and terms for
international trade, including the responsibilities and obligations of buyers and sellers
in the transaction. Incoterms cover a range of issues such as the delivery of goods,
payment terms, and the transfer of risks between the buyer and seller.
The use of Incoterms has greatly facilitated international trade by providing a
common language and standardizing commercial practices. They help to reduce
misunderstandings and disputes between parties from different countries and legal
systems.
Incoterms are also important for determining the cost of a transaction and for
managing the risks associated with international trade. They provide a clear
framework for determining who is responsible for the costs and risks associated with
the transport and delivery of goods, such as transportation costs, insurance, and
customs duties.
Over the years, Incoterms have evolved to keep pace with changes in global trade
practices and technology. For example, the latest version of Incoterms includes new
rules for the transport of goods by container, as well as updated rules for the
electronic communication of trade documents.
In conclusion, Incoterms are an essential tool for international trade and have played
an important role in facilitating global commerce. By providing a common set of
rules and terms, they help to reduce misunderstandings and disputes, and provide a
clear framework for determining the costs and risks associated with international
transactions.

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2-GLOBAL COMMERCE

International economic transactions refer to any exchange of money for goods,

services, or capital that takes place between different countries. In the realm of global
commerce, international economic relations hold high significance, as they involve
the interchange of products or services for monetary compensation. (Kemer, 2005, s.
3)

International trade has progressed alongside the advancement of human economy

and culture. The advancement of technology, rising global population and
globalization have all played significant roles in driving the demand for global trade.
The surge in international trade resulted in the emergence of disputes that were
bound to happen. The lack of consensus on fundamental business aspects arising
from varying trade customs and linguistic disparities has been a significant
contributing factor to conflict incidence. The initial constituents of a contract in
commercial activities encompass several factors, including the timing of contract
execution, the location of performance, insurance coverage, pricing responsibilities,
transportation arrangements, cost allocation, customs tariffs, and expenses associated
with import and export transactions. In essence, these variables tend to render
international trade more intricate compared to domestic trade. From an enforceable
standpoint, it is imperative to reach a consensus concerning these fundamental
components at the outset. Economic transactions could be subjected to unforeseen
obstacles and conflicts may emerge, potentially leading to disruptions in trade. In
order to establish unanimity of understanding among parties from the outset,
employment of fundamental and shared concepts is imperative. Consequently,
dissimilar interpretations of identical contractual terms may be drawn by the parties
involved. International trade pertains to the exchange of goods and services among
individuals or businesses located in disparate geographical locations, characterizing
it as a transnational phenomenon. Individuals residing in distinct geographic
locations exhibit heterogeneous commercial customs and behaviors. The enactment
of standardized concepts is crucial for the successful functioning of global trade
operations.

2.1-International Commercial Contracts

International trade is a domain wherein stakeholders are disinclined to be subject to
the effects of their respective domestic legal systems. Facilitating international trade
involves allowing the involved parties to engage in exchange on a level playing field,
fostering a spirit of mutual confidence and cooperation within the commercial
sphere, optimizing the freedom of choice, and introducing straightforward and
equitable methods of resolving potential conflicts. (ŞANLI/EKŞİ, s. 3)

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International commercial contracts represent legally enforceable agreements entered
into between parties from diverse jurisdictions for the purpose of conducting
transactions involving the exchange of goods or services. Contracts may be
established among individuals, corporations, or other legal entities and may
encompass diverse sectors, including but not limited to manufacturing, agriculture,
technology, and finance.

The process of drafting or negotiating an international commercial contract

necessitates the careful evaluation of various crucial aspects. The selection of
governing law is a pivotal factor in the agreement. In certain instances, the parties
involved in a legal matter may come to an agreement to employ the laws of one of
the respective countries, whereas in other circumstances, an international convention
or treaty may be deemed applicable. (Vogenauer, 2015, s. 4) The assessment of
probable implications of the opted legislation, including the construal of specific
clauses, the access to juridical recourses, or the influence on the feasibility of the
agreement, is of paramount significance.

Another crucial element to consider pertains to the governing body responsible for
resolving disputes. Parties to a contract may opt to incorporate an arbitration clause,
which outlines the selection of an unbiased third-party to mediate disputes that fall
outside the jurisdiction of the court system. Conversely, the contract may establish
the competent legal authority or tribunal with jurisdictional power to adjudicate on
any potential conflicts that may manifest. It is pertinent to conscientiously
contemplate the benefits and drawbacks of each alternative, taking into account the
temporal and monetary commitments, the level of proficiency of the decision-maker,
and the enforceability of the award or judgment. (Vogenauer, 2015, s. 6)

International commercial agreements may incorporate diverse stipulations

concerning the commodities or amenities being rendered. These provisions may
pertain to matters concerning the quality, quantity, specifications, packaging,
labeling, or delivery of goods, in addition to the extent, tenure, milestones, or
acceptance criteria of services. It is imperative to guarantee that these stipulations are
evident, precise, and congruent with the parties' intended purposes.

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International trade fulfills the demands of liberty and expediency through its
foundation on commercial agreements. As international trade lies at the core of
economic globalization, it is imperative to recognize that international commercial
agreements play a crucial role in facilitating the exchange of goods and services
between nations. The principle of "freedom of contract" that forms the foundation of
contracts within national jurisdictions is similarly observable within the realm of
international law. In this manner, the involved parties possess the liberty to
independently determine the scope of the agreement and corresponding obligations,
thereby granting them a degree of autonomy and freedom in their decision-making
processes. .(M.Kemal Oğuzman/M.Turgut Öz,borçlar hukuku genel hükümler ,72.)

Furthermore, international commercial agreements may comprise multiple provisions

pertaining to the remittance of the contractual fee. The contractual provisions cited
may denote the currency, manner, schedule, or venue of remittance, in addition to
contingencies for delinquent payment in the form of penalties or interest, and
provisions for warranties or representations affiliated with the payment. The
assessment of risks that are potentially associated with the selected payment method,
such as currency fluctuations, exchange controls, or fraudulent activities, stands as a
significant undertaking requiring consideration.

International commercial agreements may incorporate diverse provisions concerning

intellectual property rights, confidentiality, accountability, or force majeure. These
provisions may concern matters such as intellectual property ownership, licensing,
usage, or infringement, confidentiality or disclosure of sensitive information, liability
limitations or exclusions, and risk allocation and responsibility in cases of
unforeseeable events. It is imperative to customize these clauses to the distinct
demands and environments of the involved parties, whilst conforming to the
pertinent legal and commercial norms.

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International commercial contracts are intricate legal instruments that necessitate
prudent development, bargaining, and execution. It is recommended to consult with
legal and other professional specialists possessing expertise in the field of
international trade and commerce.

Figure 2.1: International commercial agreement

2.2-International Commercial Sales

In international trade practice, while commercial terms are encountered in every type
of contractual relationship, it is observed that commercial sales have distinct
characteristics. This feature arises from the development of international trade
mainly based on large-scale sales contracts, and nowadays, it is generally realized
within the scope of large volume sales contracts. (Cemal ŞANLI, (Ticari Akitlerin
Hazırlanması), s. 1.) International commercial sales contracts refer to contractual
arrangements that encompass the transfer of a commodity in exchange for monetary
compensation between parties situated in distinct nations, without regard to their
citizenship, chiefly amongst parties that lack adequate preparedness for such
transactions. (Cevdet YAVUZ, Türk Borçlar Özel Hukuku, Beta Yayınları, Đstanbul,
2007, s. 41.)

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Throughout the course of history, varying regulations have been implemented in
relation to maritime transportation. Consequently, the ship operator became
accountable for non-delivery of entrusted goods, even in situations where there was
no fault on their part. Despite the rising significance of maritime transport, land
transportation remains bound by the terms of the exception agreement and has not
achieved comparable levels of progression.

Despite the concept of a sales contract is widely understood, there may be some
ambiguity when it comes to determining whether a sale is considered to be an
international commercial sale. Some experts believe that a sales contract is subject to
multiple legal systems, while others suggest that the nationality of the parties
involved, the location where the contract was agreed upon, and the cross-border
nature of the goods being sold are all factors that point to an international transaction.
In this sense, the definition of an international sales contract should be more precise.
Such contracts typically involve the transfer of goods between countries via various
modes of transportation, including rail, land, air, and sea, and require currency
exchange between the parties. Today, these contracts are facilitated through
container shipping or traditional transportation methods. (d’Arcy, Murray,Cleave,
2000: 2)

Figure 2.2: International commercial sales scheme.

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2.3-Contract of Carriage

A contract of carriage is a legally binding agreement that sets out the terms and
conditions of transportation services provided by a carrier to a shipper or consignee.
This agreement defines various aspects of the transportation service, such as the
goods being transported, the destination, the delivery timeline, and the associated
costs. Additionally, it outlines the rights, obligations, and liabilities of both parties,
such as compensation for any loss or damage to the goods, insurance requirements,
and potential consequences of any breaches of the contract. In summary, a contract
of carriage plays an important role in ensuring the safe and efficient transportation of
goods while protecting the interests of all parties involved.

The apportionment of risk and liability in the contract of carriage is a fundamental

element of global trade and commerce. The reason for this is attributed to the
transportation of goods between different locations, which subjects them to various
risks and perils such as loss, impairment, theft, and prolongation. The contractual
agreement of carriage is established with the intent of allocating the burden of
potential hazards, as well as establishing liability for any resulting losses. Typically,
the onus of securing the sound and effective conveyance of merchandise from its
origination to its ultimate stopping point lies with the transporting entity, while the
party responsible for appropriately packaging, labeling, and documenting the goods
is the sender.

The apportionment of risk and responsibility within a contract of carriage is usually

determined by means of multiple clauses and provisions present in the contract,
which include but are not limited to the carrier's liability, insurance prerequisites, and
force majeure clauses. As an illustration, the contractual agreement may prescribe
that the transport provider bears responsibility for any loss or damage that arises in
the course of transportation of the merchandise, barring instances of force majeure.
Force majeure provisions are commonly incorporated into contractual agreements in
order to shield the carrier from accountability in situations whereby circumstances
outside of their control - e.g., cataclysmic weather conditions or political turmoil -
impede the timely transportation or result in the loss of merchandise.( Brownsword,
R., & Goodwin, M. (2018). Transport law: 44)

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The transportation of goods across international borders necessitates compliance with
relevant international laws and regulations,such as the International Convention for
the Unification of Certain Rules of Law Relating to Bills of Lading (Hague-Visby
Rules) or the United Nations Convention on Contracts for the International Sale of
Goods (CISG). The legal frameworks in question offer guidance pertaining to the
rights and obligations of each party involved, and serve to establish standardized
commercial practices across diverse countries and regions. (International Chamber of
Commerce. (2020). ICC Guide to Incoterms 2020. ICC Services Publications.)

There exist diverse transportation modalities to convey commodities such as road,

rail, air, and sea transportation. Road transport is often considered the optimal mode
for short-distance carriage owing to its versatile nature and cost-effectiveness. Rail
transportation can prove to be more efficient and cost-effective when it comes to
covering longer distances. Air transportation is widely regarded as the swiftest form
of transportation; however, it is also the most costly, rendering it optimal for high-
value or time-sensitive commodities. Sea transportation is frequently employed to
transport substantial quantities of goods across vast distances, such as
intercontinental shipments.(Mangan, J., Lalwani, C., & Butcher, T. (2016). Global
logistics and supply chain management,27.)

Figure 2.3: Transportation of goods by type of transport

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3.-INCOTERMS

The analysis of Incoterms regarding their origins necessitates a preliminary

consideration of the International Chamber of Commerce's (ICC) nature and
structure, given that this entity represents the source that promulgates these
regulations. The International Chamber of Commerce was established in 1919 during
an international conference held in Atlanta, USA, under the guidance of several
influential nations including Belgium, France, Italy, England, and the USA.(ÜLGEN,
Ticari İşletme Hukuku, s. 30.) The International Chamber of Commerce was founded
with the primary objective of promoting the progress of global trade and investment.
Its overarching aim is to cultivate emerging markets, thereby encouraging the
unimpeded flow of goods, services, and capital.( https://iccwbo.org/about-icc/)

Furthermore, the International Chamber of Commerce functions as a proponent for

unrestrained markets, the liberalization of commerce, and the elimination of
hindrances to trade. The tenets of liberal and equitable competition, morally sound
commercial conduct, and conscientious enterprise are being advanced through this
initiative. The International Chamber of Commerce holds a pivotal position in the
resolution of disputes via its International Court of Arbitration, offering an unbiased
and efficient approach to the settlement of commercial conflicts.

The International Chamber of Commerce is established with the primary aim of

facilitating worldwide economic development, encouraging collaboration among
nations, and furnishing corporations associated with international trade with a
conducive milieu. Through the establishment of benchmarks, provision of direction,
and promotion of the concerns of the business arena, the International Chamber of
Commerce contributes to fostering the growth of a prosperous and enduring
international economy.

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The International Chamber of Commerce (ICC), recognized as the foremost
international business organization, has played a pivotal role in the formulation and
revision of the Incoterms regulations with the purpose of creating a uniform and
streamlined framework for international trade operations.

Agreeing to the Universal Chamber of Commerce (ICC), Incoterms, which stands for
International Commercial Terms, are a set of universally recognized rules that
solidify the commonly utilized terms in worldwide exchange, giving a standardized
system and translation (ICC, n.d.).The adoption of a widely accepted framework of
regulations, known as Incoterms, serves to mitigate confusion and promote
consistency in international trade, resulting in reduced ambiguity and enhanced
efficiency in commercial transactions. (Gabriel, 1999: 63)

By incorporating the specified terminology outlined in the Incoterms within

contractual agreements, parties are able to establish unambiguous rights and
obligations, as well as definitive provisions concerning liability for damages during
the transportation of goods and other variable components of the contract. In this
manner, conformity within global commercial practices is guaranteed, ultimately
expediting commercial relations. The divergent understanding of contractual
terminology across various jurisdictions in international commerce poses certain
inconveniences. In light of this, the adoption of the Incoterms provisions, as
promulgated by the International Chamber of Commerce, is widely regarded as
salutary for mitigating such difficulties and promoting consistency in global trade.
(Bahattin Bahadır Erdem Milletlerarası Hukuk ve Milletlerarası Özel Hukuk Bülteni,
Sayı:1-2)

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3.1-Evolution of Incoterms

International trade has existed for thousands of years, evidenced by records of

trading practices that date back to the ancient civilizations. The civilisation of the
Sumerians located in Mesopotamia presents an early example of long-distance trade
dating back to 3000 BCE. This exchange involved a variety of products ranging from
textiles, metals, to agricultural commodities. The Silk Road, an intricate network of
commercial routes that linked Asia and Europe, served as the conduit for trade
between these two regions for a remarkable period of 1,500 years, commencing in
the 2nd century BCE. The historical archives illustrate that transnational commerce
has been a fundamental component of human civilization for a substantial period of
our past.( Bentley, J. H., & Ziegler, H. F. , 2019)

As international trade expands, the increasing complexity of trade contracts

necessitates the simplification of international conventions.
The rules of INCOTERMS are changed to match changes in global trade, including
improvements in the economy, laws and technology. The rules of INCOTERMS
were changed a few times after 1953, in the years 1967, 1976, 1980, and 1990. The
rules called INCOTERMS 2020 were updated and started on January 1, 2020.
However, with the change made in 1974, the term FOB Airport was added to
commercial terms.

In 1975, a three-letter coding system was implemented by UNECE avert potential

challenges arising from linguistic differences. In 1980, standardization was attained
in written communication.

The terms, including the INCOTERMS 1980 Rules, exist a diversity in the types of
businesses, and they are categorized based on their corresponding responsibility
programs. Several versions of the terms Free Carriage, Freight Carriage, Insurance
Paid and Freight Carriage Paid have been incorporated.

1923

The ICC made its initial trade rules for dealing with other countries. In 1919, traders
from 13 countries used the same words for trading with other countries. People
studied this and later looked at six more trading words. It came out in 1923.

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1928

The 1923 edition underwent simplification. The inconsistencies pertaining to both

the meaning and provisions have been rectified. The investigation of terminology
related to international trade was augmented and elucidated to encompass a
comprehensive analysis of 30 countries.

1936

Global rules for international trade lovers published for the first time. The result of
extensive work included FOB, FAS, C&F, CIF, Ex Ship and Ex Quay.

1953

Rail transportation has been added to the regulations. The Incoterms clauses went
through a suspension during World War II, and their publication was delayed until
1953 after initial revisions were made. During this update, three additional delivery
methods were introduced specifically for foreign trade transactions that other than
sea transport. The newly added rules are DCP (Delivered Costs Paid), FOR (Free on
Rail) and FOT (Free on Truck).

1967

The third revised version was released to fix mistakes made in the previous ones.
Two new trade terms were created to adress delivery at frontier (DAF) and delivery
at destination(DDP).

1974

With the progression of air transportation, it became imperative to enforce

regulations that cater to the burgeoning significance of air transportation in
international trade. The International Chamber of Commerce (ICC), cognizant of the
increasing importance of air transportation, developed the FOB regulation that is
intricately tailored for the airfreight sector. This regulation establishes the liability at
which the obligation shifts to the carrier.

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1980

The escalation in container traffic necessitated the implementation of fresh protocols

and formalities pertaining to cross-border commercial transactions. The present study
reports the inclusion of the foreign trade designation FRC (Free Carrier at Specified
Point) in the context of goods that are not directly loaded onto the ship, but rather are
retrieved from a defined shoreline location, such as a container.

1990

A comprehensive and noteworthy revision has been published, aiming at simplifying

the international trade regulations pertaining to diverse transportation modes as
delineated in the fifth revision while concurrently enhancing their importance. The
revised edition furnishes more distinctly explicated resolutions to antecedently
encountered concerns.The terms FOR (Free on Rail), FOT (Free on Truck) and FOB
(Free on Airport & Ship) have been simplified with FCA.

2000

The “License, Authorisations and Formalities” section of FAS and DEQ Incoterms
rules were altered to adhere to the standard procedures that are commonly utilized by
customs authorities with regard to the identification of the exporter and importer of
record.

2010

Incoterms 2010 brought together and unified the D-family of rules, eliminating DAF
(Delivered at Frontier), DES (Delivered Ex Ship), DEQ (Delivered Ex Quay), and
DDU (Delivered Duty Unpaid), while introducing DAT (Delivered at Terminal) and
DAP (Delivered at Place). Furthermore, modifications were carried out to underscore
the heightened accountability of both parties involved in a transaction for active
cooperation in the circulation of information. Accommodations were also made to
facilitate the practice of "string sales."

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2020

To adjust to the persistently changing worldwide scene of international trade, the

foremost later modification of the foreign trade conditions took impact on January 1,
2020, guaranteeing pertinence and arrangement with the current trade environment.

3.2 Function of Incoterms

The reason of Incoterms within the field of international trade is to translate the
foremost commonly utilized terms related to the conveyance of the products. For this
reason, it is to form a set of universal rules and hence to avoid the distinctive
elucidations of such terms by the parties included in outside trade activities.
(ÖZALP, Abdurrahman: 5) The diverse interpretations of FOB across various cities
and ports can lead to confusion and disagreements in the context of international
trade.

It is imperative to underscore that the scope of the Incoterms pertains solely to

matters pertaining to the duties and entitlements of the parties involved in purchase
and sale agreements for the conveyance of the merchandise being traded.
(International Chamber of Commerce. (2000), Incoterms 2000)

The aforementioned statement unambiguously asserts the existence of sales

agreements within the purview of Incoterms. It was underscored that the
commodities, which are the object of concern in the sales agreement, are
unequivocally mobile and concrete in nature. Consequently, the exchange of
intangible goods does not fall under the purview of the Incoterms. (YILMAZ, Mutlu.
ÖZKEN, Ahmet. ŞAHİN, Necmettin: 3815)

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Incoterms have garnered significant success and proliferation in practical application,
yet their employment has also resulted in certain misperceptions and misuses. The
prevailing belief is that these agreements are most applicable to contracts for the
transportation of goods and services, as they furnish a comprehensive covenant that
encompasses all relevant obligations, including payment. However, such an
interpretation is not deemed accurate. The regulations solely oversee the obligations,
expenses, and loss that arise as a consequence of the transfer of goods from the seller
to the buyer. It is imperative to comprehend that the regulations governing Incoterms
do not form a flawless sales agreement. The Incoterms regulations serve to establish
the allocation of responsibilities between the seller and the buyer with regards to
carriage, insurance, and associated costs during the delivery of goods. These rules
specify which party shall assume such obligations and to what extent. (ÖZALP,
Abdurrahman. A.g.e.sh.6)

In addition to this, it is noteworthy that the aforementioned regulations do not govern

the remuneration for the goods, the modality of payment, the transfer of ownership or
the ramifications of contract violations. (ÖZALP, Abdurrahman. A.g.e.sh.7)

International transactions for the sale of securities are commonly conducted across
national borders and among geographically dispersed parties. As a result, it is
imperative that both parties possess a mutual understanding and interpretation of the
terms and conditions governing cross-border trade. The aforementioned element
bears significant weight in the context at hand. (Erdem, 2001: 188)

The implementation of INCOTERMS rules serves to establish uniformity and

perpetuity in commercial transactions through the utilization of standardized
abbreviations for widely recognized contractual terms. In view of the foregoing, it is
expedient that cross-border commercial transactions be expedited, as this would
effectively mitigate the challenge of identifying the jurisdictional legal framework to
be applied and minimize the associated issues attributable to varying interpretations
resulting from such legal complexities. (Erdem, 2001: 189)

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3.3 Legal Nature

Typically, Incoterms do not carry binding force unless expressly included by mutual
agreement of the contracting parties. In this instance, ascertaining the legal
classification of Incoterms® proves to be a valuable pursuit. Divergent views exist
regarding this topic within scholarly discourse. The matters explicated within
Incoterms represent a manifestation of deeply entrenched conventions pertaining to
shipment and delivery found within contractual agreements. Consequently, it bears
resemblance to international norms and practices, commonly referred to as
customary international law, enshrining unwritten norms that arise as a result of the
conduct and actions of international legal actors. (Cemal Şanlı, Emre Esen and İnci
Ataman-Figanmeşe, Milletlerarası Özel Hukuk, 2020 ; Hüseyin Pazarcı, Uluslararası
Hukuk ,2019 .; Melda Sur, Uluslararası Hukukun Esasları ,2019).

The parties have reached a mutual understanding regarding the implementation of

Incoterms. In the event that these regulations are stipulated within the terms of the
agreement, it would be feasible to implement them. It is imperative for the parties
involved to mutually acknowledge and consent that the contractual agreement to be
established shall be in accordance with the prescribed regulations. (Sabih Arkan,
Ticari İşletme Hukuku.2020 ).

As Incoterms lacks the legal attribute, its operational framework does not possess the
structure of a legal instrument. The utilization of Incoterms as a framework for
regulating trade transactions is contingent upon its incorporation into the contractual
agreement by the contracting parties. [Hartmut Schneider, ‘Incoterms 1990’, 1991
RIW 92; Wolfgang Lehr, Der Exportvertrag] International customs and rules are
considered as a default set of regulations that come into effect in the absence of an
explicit provision pertaining to the particular dispute at hand. The divergence in
application renders Incoterms unsuitable for designation as international customary
law.

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3.3.1 Commercial custom

Despite being absent from the established conventions of trade practices, the concept
of commercial custom denotes the customary and universally acknowledged
regulations within commercial circles that serve to discern the intent of the involved
parties. (Kuyucu, 2011: 16) For any given action to be deemed a commercial
practice, it is imperative that the individuals involved adhere to it in a consistent and
widespread manner. Moreover, this practice has been employed extensively and with
a sense of voluntary accountability among the workforce. Commercial customs serve
two significant purposes. One imperative is to fulfill contractual obligations by
addressing any gaps present in said contracts, while another imperative involves the
ability to provide commentary on the parties' intentions. (Kuyucu, 2011: 16-17) In
the realm of commercial affairs, it is the customary practices that carry greater
weight than supplementary legal provisions. Nevertheless, the parties concerned may
opt to subordinate these ostensible customary norms to a subsidiary position as per
their preference. (Doğan, 2002: 343-344)

Commercial practices can be instituted in both international and domestic legal

systems. This assertion emanates from the German doctrine and advocates for its
outright acceptance and direct application across all situations. Furthermore, with
respect to an alternate perspective, there exists a potential avenue for its
incorporation within the framework of international law. In accordance with the
perspective espoused by the German doctrine, Incoterms ought to be deemed as a
customary procedure in business affairs, and therefore, should be implemented
without any intermediate intervention. An alternative perspective posits that the
Incoterms clauses ought to be categorized into distinct classifications: peripheral
regions and central regions. An alternative perspective suggests the categorization of
Incoterms clauses into distinct classifications of side areas and core areas. The
incorporation of secondary area clauses like DDP (Delivered Duty Paid) and FCA
(Free Carrier) into the primary region, and their universal applicability, is subject to
the endorsement of commercial groups. Conversely, primary region delivery forms,
namely FOB (Free on Board) and CIF (Cost, Insurance, and Freight), encompass
clauses that have been long-standing and adhere to conventional practices. (Doğan,
2002: 344)

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3.3.2 Trading custom

Customs are longstanding and obligatory patterns of behavior that are widely
recognized by the pertinent communities. Due to its character as an objective legal
principle, judges are required to undertake an ex officio inquiry and assessment.
(Arkan, 2005: 88) To reinstate the standard regulations, it is imperative that the
foremost prerequisite is to maintain a steadfast and consistent application over a
prolonged period. Nevertheless, this attribute in isolation does not suffice. Moreover,
it is imperative that this regulation is adhered to with a level of strictness
commensurate with a legal statute within the realm of commerce. Moreover, it is
imperative that actions or decisions do not infringe upon public order, morality, and
legal codes. The regulations derived from customary practices and traditions possess
the capacity to extend to both traders and non-traders, albeit the latter group may
need to acquaint themselves with such norms in certain circumstances. (Doğanay,
2003: 9-12) According to Turkish legislation, customary norms are deemed
legitimate for occupations that lack commercial regulation and are afforded
preferential treatment in such instances. (Arkan, 2005: 86). The practical application
of Incoterms can only be achieved through explicit invocation of one of the terms
within the Incoterms in contractual agreements between the concerned parties.
Despite the explicit reference to a particular term in a contract, it is not uncommon
for the intent or volition of the parties to be inadequately represented thereby.
Furthermore, the involved parties are obligated to explicitly declare the specific
rendition of Incoterms that they intend to enforce. In the present discourse, an
illustrative scenario can be considered, wherein the contractual parties who have
opted for the CIF delivery mode may elect to adopt the Incoterms 2010 version. To
effectuate this, it would be requisite for the parties to stipulate the intended port of
arrival explicitly in the agreement, employing the form "CIF Mersin, Incoterms®
2010." In the event of a dispute, the court shall uphold the validity of the provision
pertaining to CIF if such provision is encompassed within the applicable law selected
by the court. In the context of Turkish law, it should be noted that the provisions
pertaining to CIF sales in the Turkish Commercial Code (TCC) numbered 6762 shall
be implemented, subject to consideration and evaluation, until July 1, 2012. Stated
alternatively, the fact that the judges lack the capacity to effectuate the application of

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Incoterms suggests an implausibility of their attainment of customary legal norm
status.

3.3.3 Lex mercatoria

In spite of the fact that there's no delay that Lex mercatoria may be a source of law,
distinctive conclusions are supported within the tenet approximately its lawful
nature. ( BERGER, Law Merchant, 62) The focal point of the discussions pertains to
the autonomy of the lex mercatoria as a distinct and autonomous legal system. There
exist varying opinions regarding the legal status of Lex mercatoria. Some scholars
argue that it represents a self-contained legal system, whereas others ascribe to the
view that the definition of law is inexorably linked to state authority and therefore
precludes the existence of an autonomous legal order such as Lex mercatoria.
(WINDBICHLER, 8742) The idea that Lex mercatoria is not its own separate set of
laws has been argued about in academics for several reasons. Some people believe
that the lex mercatoria is a special way of doing business around the world, but it
does not exist all by itself. (BERMAN ,53, 63; KERKOVIĆ, 90) In an alternative
conceptualization, it is acknowledged that the lex mercatoria lacks a comprehensive
legal framework that is capable of addressing all potential legal challenges inherent
in international commercial transactions.(DOĞAN, Akreditif, 146-147; DOĞAN,
Teminat, 178; AYOĞLU, Lex Mercatoria, 75 ) The final comprehension can be
divided into three distinct perspectives that altogether reject the notion of lex
mercatoria, emphasizing instead the presence of commercial customs and traditional
customs. (BERGER, Law Merchant, 61-64; ERDEM, 232-325). Opponents of its
delineation as an autonomous legal system contend that the amorphous nature of the
lex mercatoria concept and the challenges in ascertaining and inadequacies in its
substance render it ineligible for recognition as a legitimate legal order. (BARON,
121; WINDBICHLER, 8742.) The present perspective postulates that the lex
mercatoria does not embody a legal system with regards to international economic
interactions, but rather serves as a legal font.(DOĞAN, Akreditif, 18; DOĞAN,
Teminat, 175) In the context of international conventions, it is widely recognized that
lex mercatoria holds the status of an autonomous legal source, substantiating this
perspective. The adoption of lex mercatoria as an autonomous source is affirmed by
international conventions, thereby endorsing this perspective. In opposition to the
stance posited by certain scholars who contend that Lex mercatoria lacks the capacity

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to independently establish a system, as it merely comprises a collection of
regulations, an opposing perspective asserts that although it indeed constitutes a
system of regulations, it significantly diverges from international law, and thus
cannot be treated as a substantive legal principle.(BERGER, Law Merchant, 61 vd.;
ERDEM, 332). The contention persists that upon recognizing Lex mercatoria as a
self-sustaining legal system, it ought to be bestowed the status of a legal framework
that lies intermediate to domestic law and international law. (WINDBICHLER,
8742.) Moreover, a third perspective, denoted as the amalgamation of these
antithetical approaches, situates the lex mercatoria at an intermediate position among
them.(MAZZACANO, 1.) The prevailing perspective, with which we concur, posits
that lex mercatoria refers to a collection of principles germane to international
commerce law. Its conception was envisaged as a supplement to the limited
compendium of substantive legal norms recognized in international law, and is
conceived as an entity separate from national law. It is deemed to have originated
directly from international commercial conventions and traditions.(ERDEM, 322)

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4. INCOTERMS GROUPS

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