In this description, a critical point is that point in transit at which the seller’s obligations cease and the buyer’s obligations commence.
This chart aims at illustrating the relationship between the seller and the buyer in international trade, and at providing a useful tool both for day-to-day work and for drawing up contracts of sale. The chart is based on the trade terms contained in Incoterms 2000 approved by the International Chamber of Commerce and dealing with the seller’s and buyer’s obligations to one another.
The trade terms only concern obligations stipulated in the contract of sale. As the Incoterms take the form of written text, it is difficult to illustrate in a simple manner all the different situations occurring in international transports.
The contracting parties may adopt the Incoterms as such as the basis for their contract, but in certain cases amendments and additions can be made. In case of difference of interpretations between this chart and the Incoterms, the latter shall be decisive. As for differences of interpretation between the Finnish and Englishlanguage Incoterms, the latter takes precedence. To avoid misinterpretation, this chart should be used together with Incoterms 2000.
Documents refers to the seller’s and the buyer’s obligation to acquire documents to be produced
at certain stages of transit. The validity of the documents are, however, not indicated. Such
documents include, for instance, export licences, certificates of origin, transport documents and
Exposure to an event which may cause loss of or damage to goods is referred to as a risk. Insurance can be taken out against most risks.
All expenses for goods and transport of goods are referred to as costs.
Under the CIP and CIF clauses, the seller must, on behalf of the buyer, take out insurance at his own expense against transport risks. The clauses provide that the insurance shall be taken on at least the minimum terms and conditions – such as the Institute Cargo Clauses (C) – unless the seller and the buyer agree otherwise. These clauses cover, however, only part of the cargo risks.