Incoterms are a set of international rules, governed by the International Chamber of Commerce,

that determine the scope of the commercial clauses included in the international contract of sale.

Incoterms are also called price clauses, because each term allows to determine the elements that
compose it. The selection of Incoterm influences the cost of the contract.

The purpose of the Incoterms is to provide a set of international rules for the interpretation of the
terms most used in international trade.

The Incoterms determine:

1. The scope of the price.

2. At what point and where the risk transfer occurs on the seller's merchandise towards the
buyer.
3. The place of delivery of the merchandise.
4. Who hires and pays transportation
5. Who hires and pays the insurance
6. What documents are handled each part and its cost.

Some incoterms used:

 cost and freight

 cost, insurance and freight
 ex work
 free on board
 free alongside ship