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Five Quick Facts About Incoterms 2010

Incoterms 2010 have been effective since December 2010. Contracting parties need to familiarize themselves with the changes made from Incoterms 2000. While some of the changes are seemingly minor, others are more substantial. There are essentially five areas where the changes to the rules have been shown themselves to be important to my clients:

1. Four terms (DAF, DDU, DEQ, DES) have been eliminated and have been replaced by two new rules: Delivered at Place (DAP) and Delivered at Terminal (DAT). The two new terms were intended to allow the parties some flexibility as to the place where seller's obligations is complete when choosing the "D" terms.

2. Each of the Incoterms rules now allocates parties' responsibility to obtain or provide information for security-related clearances. Each rule also allocates responsibility for terminal handling charges, in an attempt to elimiate double-charges for those items.

3. The parties' obligations to provide contract documents may be fulfilled by providing electronic records if the parties have agreed or if providing electronic records is customary. Thus, the rules may adapt as industry move towards wider acceptance of electronic records.

4. The rules now allow for string sales, in which the seller's obligations is fulfilled not by shipping goods but by procuring goods already shipped.

5. The rules and comments have been drafted to make clear tha tthe rules can be used internationally, as well as domestically. Where the rules address inport and export formalities, the rules make clear tha tthe parties bear those responsibilities "where applicable."

I encourage you to contact me with quetions related to these new rules and any relevant contract documents.


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