Trade Terms in foreign trade usually refer to International Commercial Terms (Incoterms), which are standardized rules defining the division of responsibilities, costs, and risks between buyers and sellers during the delivery of goods. They specify who is responsible for transportation, insurance, customs clearance, and the point of risk transfer, and are core clauses of a contract. Common terms include FOB, CIF, EXW, etc. Usage scenarios include quotations, contract signing, and letter of credit operations. Notes: The version (e.g., Incoterms 2020) must be specified to avoid confusion with payment methods; different terms affect costs and risks, and the choice should be based on the mode of transport and trade practices. Unlike 'payment terms,' trade terms focus on delivery responsibilities, while payment terms involve payment timing and methods. Correct use can reduce disputes and improve transaction efficiency.
📝 Examples
1. This transaction adopts CIF trade terms, where the seller is responsible for freight and insurance to the destination port, and the buyer bears the risk after unloading. (Note: Under CIF, the seller arranges transport and insurance, and risk transfers at the port of shipment.)
2. The contract stipulates FOB Shanghai trade terms, under which the buyer must charter a vessel, book space, and pay the ocean freight. (Note: Under FOB, the buyer is responsible for the main freight, and the seller bears costs before loading.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner