International trade terms are also known as price terms.
In international trade, the obligations of buyers and sellers will affect the price of the goods. In the long-term practice of international trade, some trade conditions that are closely related to prices are directly linked to prices, and a number of quotations are formed. Each model stipulates the obligations of the buyer and the seller in certain terms of trade. The term used to indicate this obligation is called a trade term.
The terms of trade represented by trade terms are mainly divided into two aspects: one, indicating the price composition of the goods, whether it includes the main subordinate costs other than the cost, namely freight and insurance; and second, determining the terms of delivery, which means that the buyer and the seller are The division of responsibilities, costs and risks assumed by each other in the delivery of goods.
Trade terms are an essential part of the expression of prices in international trade. The use of trade terms in the opening quotation clarifies the respective responsibilities, costs and risks of the parties in terms of the delivery of goods, and explains the price composition of the goods. This simplifies the formalities of transaction negotiation and shortens the transaction time. Since the international practice of stipulating trade terms provides a complete and precise explanation of the obligations that buyers and sellers should assume, it avoids certain disputes that may arise in the performance of contracts due to inconsistent understanding of the terms of the contract.