In 1936, the International Chamber of Commerce established the International Rules for the Interpretation of Trade (Incoterms) for the purpose of providing a set of international rules outlining the most commonly used foreign trade terms.
Incoterms 2010 consists of 11 terms that outline the most common division of responsibility and risk in the international transaction. The first term, EXW, defines the sellerís responsibility to simple make the goods available to the buyer at the seller's own premises (EXW). Next, the seller is called upon to deliver the goods to a carrier appointed by the buyer in the origin country (FCA, FAS, FOB). The C-terms designate the seller to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment and dispatch (CFR, CIF, CPT, CIP). Lastly, the seller has to bear all costs and risks needed to bring the goods to the place of destination (DAT, DAP, DDP).Incoterms 2010 introduces DAT and DAP, which replaces DAF, DES, DEQ and DDU (Incoterms 2000)