Incoterms Rules: What are they and how should they be used?

“Incoterms®” is a trademark of the International Chamber of Commerce (ICC) used to designate the set of rules created by the ICC, which is widely recognized as the world’s most prestigious business organization.

The first appearance of these rules goes back to 1936, due to the rising necessity of adopting uniform international rules for trade. This set of rules intended to give security and confidence to transactions made between trading partners around the world.

The purpose of the Incoterms® rules is to establish a standardized language for those who participate in trade, internationally or nationally, which is why the correct use of these rules contributes to providing legal certainty in negotiations between trading partners, helping the parties define their respective responsibilities and obligations.

The most current version of the rules is the Incoterms® 2020.


What are the Incoterms® rules used for?

The rules are used to determine obligations for the contracting parties. In essence, they establish the conditions for the delivery of traded goods and, consequently, the transfer of risks.

It is important to emphasize that the Incoterms® rules do not deal with the transfer of property of the goods, payments, credits, or guarantees.

Substantive matters of procurement shall be governed by the contract, as well as by Treaties or Conventions, and other laws that may apply to the contract.

It is essential to note that the Incoterms® rules are freely adopted, that is to say, they need to be explicitly incorporated into the contract to be applicable and, therefore, enforceable.


What is the right way to agree on a delivery using Incoterms® 2020?

The correct way to agree on a delivery using Incoterms® 2020 is the following:

Rule + Point + Place + Incoterms® edition + delivery time

i.e.: FCA, International Airport Silvio Pettirosi, Asunción-Paraguay, Incoterms® 2020, June 1, 2020.


If you are interested in learning more about Incoterms® rules and how to use them, contact Gabriela Melgarejo at