In this three part series of articles, I will endeavor to highlight some commercial terms of Sale of Goods Agreements.
Following the inking of the agreement what is left is performance by respective actors.
This piece focuses on International Commercial Terms (Incoterms) as they relate to transportation of goods across borders. In this era where individuals and corporates alike are procuring goods from almost anywhere in the world by clicks of buttons, it is important that one has an appreciation of what the transaction entails and it’s implications on the buyer/seller.
Recently, in my quest to play my part in equipping my children to face the world, I assigned my son to oversee the specifications, ordering, production, shipping and delivery of a few branding materials.
Being a millennial, he was on to the internet and consulting on whether I was happy with the samples and of course, when I would be making payments once all was agreed with the supplier!
It was great to watch his confidence grow as he navigated terms, language barriers, time differences and so on.
He quickly realized that there were a number of players in the road to getting the goods to us. Freight, insurance, taxes, risk and delivery to name but a few.
Finally, some materials arrived and my son excitedly went to pick them up from the warehouse and got home with a big proud smile on his face!
“I did it!” he remarked, strutting around the house like he had just won the lottery!
In all this experience and the back and forth between us, I realized that it would be helpful for me to share some aspects of sale of goods agreements.
Incoterms are standardized terms used in international trade to define the responsibilities and risks of buyers and sellers during the transportation of goods. Some common Incoterms include EXW (Ex Works), FOB (Free On Board), CIF (Cost, Insurance, and Freight), and DDP (Delivered Duty Paid). Each term specifies the point at which the risk and cost transfer from the seller to the buyer.
In the next part of this series, I will go into a measure of detail on selected Incoterms and their implications.
Let’s share!
