Glossary

Incoterms

The rules that fix where cost and risk pass from seller to buyer.

Incoterms are the three-letter rules published by the International Chamber of Commerce that say exactly where cost, risk and responsibility move from seller to buyer. The term you pick — from EXW through FOB to DDP — decides who arranges carriage, who clears customs, who insures the goods and who bears the loss if something happens in transit. Choosing the wrong one is one of the most common causes of trade disputes.