In any sales
agreement, it is important to have a common understanding of the delivery terms
because confusion over their meaning may result in a lost sale or a loss on a
sale. Terms of sale define the obligations, risks, and costs of both the buyer
and seller involving the delivery of goods that make up the export transaction.
The terms in international business transactions often sound similar to those
used in domestic business, but they frequently have very different meanings.
For this reason, the exporter must know and understand the terms before
preparing a quotation or a pro forma invoice.
The most commonly
applied terms of sale in the global marketplace are the international
commercial terms, or Incoterms. A complete list of these important terms and
their definitions is provided in Incoterms 2010, a booklet issued by the
International Chamber of Commerce (ICC).