INCOTERMS 2020: Delivery Terms and Risk Transfer

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Questions and Answers

What is the risk borne by the buyer in CPT terms?

From the port of shipment to the port of destination

From the seller's premises to the port of shipment

From the port of shipment onwards (correct)

From the first carrier to the port of destination

Who covers insurance in CIP terms?

The insurance company

The buyer

The seller (correct)

The first carrier

What is the point of delivery in CPT terms?

The seller's premises

The first carrier (correct)

The port of shipment

The port of destination

What type of clauses are referred to in the content?

Institute Cargo Clauses (C) (B) Signup and view all the answers

Where is the risk transferred to the buyer in CPT terms?

At the first carrier (A) Signup and view all the answers

What does CPT stand for?

Carriage Paid To (D) Signup and view all the answers

What does CIP stand for?

Carriage and Insurance Paid (B) Signup and view all the answers

Who bears the costs in CPT terms?

The seller bears costs up to the first carrier (C) Signup and view all the answers

Who bears the risk during the whole transport?

Buyer (D) Signup and view all the answers

When is the buyer at risk under FCA?

When the goods are delivered to the first carrier or terminal at agreed time and place (B) Signup and view all the answers

What is the period of limitation for apparent loss or damage under the Haag-Visby Rules?

1 year (A) Signup and view all the answers

What is the limitation of liability for loss or damage under the Rotterdam Rules?

SDR 875/package (B) Signup and view all the answers

Who is responsible for covering insurance under FCA?

Buyer (C) Signup and view all the answers

What is the notice of claim period for apparent loss or damage under the Montreal Convention?

14 days (A) Signup and view all the answers

What is specified in FCA terms?

A specific place (C) Signup and view all the answers

What is the limitation of liability for loss or damage under the CIM Convention?

SDR 17/kg (D) Signup and view all the answers

In DPU terms, who covers the insurance until the goods are unloaded?

The seller (D) Signup and view all the answers

What is the role of the seller under FCA?

To deliver the goods to the first carrier or terminal at agreed time and place (B) Signup and view all the answers

In DPU terms, when is the risk transferred to the buyer?

When the goods are unloaded at the destination (D) Signup and view all the answers

What is the notice of claim period for apparent loss or damage under the Haag-Visby Rules?

3 days (A) Signup and view all the answers

What happens when the goods are placed at the buyer's disposal at agreed time and place?

The buyer bears the risk (C) Signup and view all the answers

What is the main difference between DPU and DDP terms?

The party responsible for duties (B) Signup and view all the answers

What is the seller's responsibility regarding documents under FCA?

To prepare transport documents (C) Signup and view all the answers

What is the period of limitation for loss or damage under the Montreal Convention?

2 years (A) Signup and view all the answers

In DDP terms, who bears the risk during the whole transport?

The seller (A) Signup and view all the answers

What is the term for 'Free Carrier'?

FCA (D) Signup and view all the answers

What is the notice of claim period for apparent loss or damage under the CIM Convention?

7 days (A) Signup and view all the answers

What happens to the risk when the goods are unloaded at the agreed place of destination in DPU terms?

The risk is transferred to the buyer (A) Signup and view all the answers

What is the period of limitation for loss or damage under the Rotterdam Rules?

2 years (B) Signup and view all the answers

In DDP terms, what is the responsibility of the seller?

To pay costs and duties (A) Signup and view all the answers

What is the key similarity between DPU and DDP terms?

Both specify a named place of destination (C) Signup and view all the answers

In DPU terms, what happens to the costs until the goods are unloaded?

The seller pays the costs (C) Signup and view all the answers

What is the primary purpose of Incoterms 2020?

To clarify the responsibilities of buyers and sellers during transportation (C) Signup and view all the answers

Why is it advisable to state the terms of delivery in the contract of sale and commercial invoices?

To prevent problems with interpretation and dispute (D) Signup and view all the answers

What is the benefit of using Incoterms 2020?

It reduces the risk of misunderstandings between buyers and sellers (B) Signup and view all the answers

What is the recommended approach to forming delivery terms?

Using Incoterms 2020 (D) Signup and view all the answers

What is the main reason for using Incoterms 2020?

To avoid disputes and misunderstandings (D) Signup and view all the answers

What is the benefit of agreeing on terms of delivery?

It avoids disputes concerning where loss or damage has incurred (C) Signup and view all the answers

What is the purpose of Incoterms 2020 in international trade?

To describe the responsibilities of buyers and sellers during transportation (A) Signup and view all the answers

What is the risk of not using Incoterms 2020?

Misunderstandings between buyers and sellers (A) Signup and view all the answers

Study Notes

Importance of Incoterms

Incoterms 2020 are essential in modern transport systems to avoid disputes about where loss or damage occurred during transportation.
Agreeing on terms of delivery helps to allocate risk between the buyer and seller during the transport chain.

Benefits of Incoterms

Prevents problems with interpretation in different countries having their own definitions of delivery terms.
Internationally recognized rules that describe who is responsible for goods in transit and for how long.
Helps sellers and buyers avoid unnecessary misunderstandings.
Recognized by authorities and courts around the world.

Notice of Claim and Limitation of Liability

Notice of claim periods and limitation of liability varies depending on the mode of transport:
- Carriage by Sea (Haag-Visby Rules): 3 days, 1 year, SDR 667/package or SDR 2/kg
- Carriage by Sea (Rotterdam Rules): 7 days, 2 years, SDR 875/package or SDR 3/kg
- Carriage by Air (Montreal Convention): 14 days (21 days in case of delay), 2 years, SDR 22/kg
- Carriage by Rail (CIM Convention): 7 days, 1 year, SDR 17/kg (Domestic SEK 150/kg)

Incoterms 2020

FCA - Free Carrier

Risk: The buyer bears the risk during the whole transport.
Costs: The buyer bears the costs.
Documents: The seller delivers the goods to the first carrier or terminal at an agreed time and place.

CPT - Carriage Paid To

Risk: The buyer is at risk when the goods have been delivered to the first carrier.
Costs: The seller pays for transportation to the named place of destination.
Documents: The seller delivers the goods to the first carrier.

CIP - Carriage and Insurance Paid To

Risk: The buyer is at risk when the goods have been delivered to the first carrier.
Costs: The seller pays for transportation and insurance to the named place of destination.
Documents: The seller delivers the goods to the first carrier and obtains insurance in favour of the buyer.

DPU - Delivered at Place Unloaded

Risk: The buyer is at risk when the goods have been unloaded at the agreed place of destination.
Costs: The seller pays for transportation and unloading.
Documents: The seller delivers the goods to the named place of destination.

DDP - Delivered Duty Paid

Risk: The seller bears the risk during the whole transport.
Costs: The seller pays for transportation, customs clearance, and duties.
Documents: The seller delivers the goods to the named place of destination, cleared for import.

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Description

Understand INCOTERMS 2020 rules for modern transport systems, including how to avoid disputes concerning loss or damage during delivery. Learn how to state delivery terms in contracts of sale and commercial invoices.