Incoterms
Definition
Incoterms (International Commercial Terms) are a set of standardized three-letter trade terms published by the International Chamber of Commerce that define the responsibilities, costs and risk transfer points between buyers and sellers in international sales contracts.
Why It Matters
Incoterms clarify who is responsible for freight, insurance, export/import clearance and risk at each stage of shipment, but they do not by themselves determine payment terms, which must be agreed separately.
Example
A contract may combine an Incoterm (e.g., CIF) with a separate payment term (e.g., LC at sight).
Relevant Authority / Source
International Chamber of Commerce (ICC)