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EXW EX WORKS (... named place) "Ex works"
means the seller's only responsibility is to make the goods available
at the seller's premises, i.e., the works or factory. The seller is not
responsible for loading the goods on the vehicle provided by the buyer
unless otherwise agreed. The buyer bears the full costs and risk involved
in bringing the goods from there to the desired destination. Ex works
represents the minimum obligation of the seller.
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FCA FREE CARRIER (... named place) This term has been
designed to meet the requirements of multimodal transport, such as container
or roll-on, roll-off traffic by trailers and ferries. It is based on the
same name principle as F.O.B. (free on board), except the seller fulfills
its obligations when the goods are delivered to the custody of the carrier
at the named place. If no precise place can be named at the time of the
contract of sale, the parties should refer to the place where the carrier
should take the goods into its charge. The risk of loss or damage to the
goods is transferred from seller to buyer at that time and not at the
ship's rail. The term "carrier" means any person by whom or
in whose name a contract of carriage by road, rail, air, sea, or a combination
of modes has been made. When a seller has been furnished a bill of lading,
way bill or carrier's receipt, the seller duly fulfills its obligation
by presenting such a document issued by a carrier.
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FAS FREE ALONGSIDE SHIP (... named port of shipment)
"F.A.S." or "free alongside ship" requires the seller
to deliver the goods alongside the ship on the quay. From that point on,
the buyer bears all costs and risks of loss and damage to the goods. Unlike
F.O.B., F.A.S. requires the buyer to clear the goods for export and pay
the cost of loading the goods.
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FOB FREE ON BOARD (... named port of shipment) Under
"F.O.B." or "free on board," the goods are placed
on board the ship by the seller at a port of shipment named in the sales
agreement. The risk of loss of or damage to the goods is transferred to
the buyer when the goods pass the ship's rail (i.e., off the dock and
placed on the ship). The seller pays the cost of loading the goods.
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CFR COST AND FREIGHT (... named port of destination)
"CFR"requires the seller to pay the costs and freight necessary
to bring the goods to the named destination, but the risk of loss or damage
to the goods, as well as any cost increases, are transferred from the
seller to the buyer when the goods pass the ship's rail in the port of
shipment. Insurance is the buyer's responsibility.
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CIF COST, INSURANCE AND FREIGHT (... named port of
destination) "CIF" is CFR. with the additional requirement that
the seller procure transport insurance against the risk of loss or damage
to goods. The seller must contract with the insurer and pay the insurance
premium. Insurance is generally more important in international shipping
than domestic shipping, because U.S. laws generally hold a common carrier
to be liable for lost or damaged goods.
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CPT CARRIAGE PAID TO (... named place of destination)
This term means the seller pays the freight for the carriage of the goods
to the named destination. The risk of loss or damage to the goods and
any cost increases transfers from the seller to the buyer when the goods
have been delivered to the custody of the first carrier, and not at the
ship's rail. Accordingly, "freight/carriage paid to" can be
used for all modes of transportation, including container or roll-on roll-off
traffic by trailers and ferries. When the seller is required to furnish
a bill of lading, way bill, or carrier receipt, the seller duly fulfills
its obligation by presenting such a document issued by the person contracted
with for carriage to the main destination.
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CIP CARRIAGE AND INSURANCE PAID TO (... named place
of destination) This term is the same as "freight/carriage paid to
(CPT)" but with the additional requirement that the seller has to
procure transport insurance against the risk of loss or damage to the
goods during the carriage. The seller contracts with the insurer and pays
the insurance premium.
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DAF DELIVERED AT FRONTIER (... named place) "Delivered
at frontier" means that the seller's obligations are fulfilled when
the goods have arrived at the frontier but before the customs border of
the country named in the sales contract. The term is primarily used when
goods are carried by rail or truck. The seller bears the full cost and
risk in delivering the goods up to this point, but the buyer must arrange
and pay for the goods to clear customs.
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DES DELIVERED EX SHIP (... named port of destination)
Means the seller shall make the goods available to the buyer on board
the ship at the place named in the sales contract. The seller bears the
full cost and risk involved in bringing the goods there. The cost of unloading
the goods and any customs duties must be paid by the buyer.
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DEQ DELIVERED EX QUAY (... named port of destination)
Means the seller has agreed to make the goods available to the buyer on
the quay or the wharf at the place named in the sales contract. The seller
bears the full cost and risks in delivering the goods to that point including
unloading.
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DDU DELIVERED DUTY UNPAID (... named place of destination)
Under these terms, the seller fulfills his obligation to deliver when
the goods have been available to the buyer uncleared for import at the
point or place of the named destination. The seller bears all costs and
risks involved in bringing the goods to the point or place of named destination.
There is no obligation for import clearance.
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DDP DELIVERED DUTY PAID (... named place of destination)
represents the seller's maximum obligation. The term "DDP."
is generally followed by words indicating the buyer's premises. It notes
that the seller bears all risks and all costs until the goods are delivered.
This term can be used irrespective of the mode of transport. If the parties
wish to make clear that the seller is not responsible for certain costs,
additional word should be added (for example, "delivered duty paid
exclusive of VAT and/or taxes").
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