What Do Incoterms Not Cover?

There are specific instances that Incoterms will not cover. Incoterms do not:

• Address all the conditions of a sale
• Identify the goods being sold nor list the contract price
• Reference the method or timing of payment negotiated between the seller and buyer
• Determine when the title, or ownership of the goods, passes from the seller to the buyer
• Specify which documents must be provided by the seller to the buyer to facilitate the customs clearance process in the buyer’s country
• Address liability for the failure to provide the goods in conformity with the contract of sale, delayed delivery, or dispute resolution mechanisms

Due to the omission of certain sale conditions, working only with Incoterms can be constricting. All parties involved in any contract should make sure that the applicable instances above are addressed before signing the contract; this ensures a smooth business transaction, as many legal matters can arise when the parties are working only with Incoterms.

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