The fundamental purpose of Incoterms is to establish criteria defined on the distribution of costs and the transmission of risks between the buyer and the seller in a contract of international sale.
Incoterms are voluntary acceptance by the parties, that is, they are not a legally binding scheme , the legally binding treaty for the 71 countries that have ratified the CISG is . Its main advantage is simplified by 11 denominations have standardized a cluster of conditions that have to meet the two contracting parties . Through this harmonization or standardization , the buyer and the seller side know exactly what to expect.
In addition to the provisions of each incoterm , a contract for the international sale of goods can support further conditions . These cases must be set carefully because Incoterms are drafted with great harmony and collect endless practice international business experiences.
Incoterms apply only in the international sales of goods , not the service because they are intangible in that logistics is not used.