The International Chamber of Commerce (ICC) first published Incoterms® in 1936 and revises the rules periodically to follow trade practice. Each edition stays in use for as long as contracts refer to it, so a contract of sale has to say which edition it applies.
Current edition: Incoterms® 2020
Incoterms® 2020 is the edition in force. Earlier editions remain valid where the parties refer to them, which is why a contract should name three things — the rule, the named place and the edition:
CIF Constanta, Romania, Incoterms® 2020
What the rules do
INternational COmmercial TERMS allocate the obligations of delivery between seller and buyer: who arranges and pays for carriage and insurance, who handles export and import formalities, where delivery takes place, and at which point the risk of loss or damage passes.
Trade terms with the same name can be understood differently from one country to another. Naming an ICC rule together with its edition is what makes the meaning the same for the seller, the buyer, their banks and the forwarder.
The rules apply only when the parties incorporate them into the contract of sale.
What the rules do not do
Incoterms® do not replace the contract of sale. They do not govern the transfer of title to the goods, the price or the terms of payment, the quality and specification of the goods, sanctions and export prohibitions, force majeure, or the law and forum for settling a dispute. Those belong in the contract itself.
They are also not the contract of carriage. What the charter party or the bill of lading says about loading, discharging, laytime and freight is agreed separately, and a trade term and a charter-party term can put the same cost on different sides. Both have to be read together before the cargo is fixed.
What changed in 2010
DAF, DES, DEQ and DDU were withdrawn and replaced by two terms: DAT (Delivered at Terminal) and DAP (Delivered at Place). The withdrawn terms are still met in older contracts and are described below.
What changed in 2020
DAT was renamed DPU — Delivered at Place Unloaded. The new name makes clear that the named place of destination does not have to be a terminal: the seller delivers when the goods are unloaded at the agreed place, wherever that place is.
DAP is unchanged: the seller delivers the goods ready for unloading, and unloading at the destination is for the buyer.
Terms met in older contracts
DAF — Delivered At Frontier (2000 edition, withdrawn in 2010)
The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport, not unloaded, cleared for export but not cleared for import, at the named point and place at the frontier, before the customs border of the adjoining country. Used when delivering to a land frontier.
DES — Delivered Ex Ship (2000 edition, withdrawn in 2010)
The seller delivers when the goods are placed at the disposal of the buyer on board the ship, not cleared for import, at the named port of destination. The seller bears all costs and risks in bringing the goods to the named port before discharging. Ocean transport only.
DEQ — Delivered Ex Quay (2000 edition, withdrawn in 2010)
The same as DES, except that the seller places the goods at the disposal of the buyer, not cleared for import, on the quay at the named port of destination. The seller bears the costs and risks of DES plus discharging the goods on the quay. Ocean transport only.
DDU — Delivered Duty Unpaid (2000 edition, withdrawn in 2010)
The seller delivers the goods to the buyer, not cleared for import and not unloaded from the arriving means of transport, at the named place of destination. The seller bears all costs and risks of bringing the goods to that place other than duty — the customs formalities and the duties and taxes on import — which are for the buyer.
DAT — Delivered at Terminal (2010 edition, renamed DPU in 2020)
The seller pays for carriage to the terminal, except for costs related to import clearance, and bears the risks up to the point at which the goods are unloaded at the terminal.
DAP — Delivered At Place (2010 edition, unchanged in 2020)
The seller pays for carriage to the named place, except for costs related to import clearance, and bears the risks up to the point at which the goods are ready for unloading by the buyer.
Incoterms® is a registered trademark of the International Chamber of Commerce. This page is a summary for orientation. It is not legal advice and does not replace the rules themselves or the contract of sale.