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Essay / Research Paper Abstract
This 14 page papers the development and definition of ICOTERMS and the advantages that may be gained from their use. This is then considered in terms of the problems that have been seen in international business. The paper argues that ICOTERMS are a tool that may reduce disputes over the interpretations of terms, which will then reduce the number of cases heard by courts. To demonstrate this the development and use of FOB and CIF are examined in the context of English case law. The role of the Sales of Goods Act 1979 is also included in the discussion. The bibliography cites 20 sources.
Page Count:
14 pages (~225 words per page)
File: TS14_TEicoter.rtf
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Unformatted sample text from the term paper:
language and culture may be seen as barriers to trade. These barriers may be the immediately apparent, but may also be indirect. For example, even where a common language
is used the definition of terms may be interpreted different by the different parties. This can give rise to disputes and costly legal battles. The potential for disputes due to
different interpretation of terms used has been recognised in a range of laws, and contracts often inclusive of relevant definitions of terms. Therefore, it could be argued, or hypothesised, that
a standard set of definition of terms that are widely accepted will have the ability to reduce the number of cases that are brought before the courts.
In 1936, the Paris based International Chamber of Commerce (ICC), proposed the ICOTERMS that were standard definition of the meaning of terms used commonly
in international trade (Freudmann, 1996). These definitions have also been accepted by the United Nations Commission on International Trade (ICOTERMS 2000). The latest version of ICOTERMS was released in
2000. This contained the definitions of thirteen commonly used terms, such as FOB and CIF contracts. These are short for free on board (fob) or cast, insurance and freight
(Biederman, 2000). Other terms included are EXW (Ex works), CPT (Carriage Paid To) and DDU (Delivered Duty Unpaid) (ICOTERMS 2000). The
definitions give the rights and responsibilities are expected of the buyers and sellers sand also the potential consequences of a breach of the responsibilities (Biederman, 2000). Therefore, these may be
seen as simple terms that facilitate interregional understanding and as such reduce the barriers and costs to international trade (Raszkowski, 2001). The definitions are not binding unless they are
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