Question

1. Please mark “True” or “False” to the following statements ( 1x15 = 15 marks):

( ) 1. Incoterms 2020 is the international rules regarding trade terms by International Chamber of Commerce. The parties must use the interpretation of Incoterms to explain the trade term in their sale contract.

( ) 2. According to Incoterms 2020, under CIF Vancouver, if there are damages to the goods during transit to the port of destination, the seller must compensate the buyer for not fulfilling his delivery obligation.

( ) 3. According to Incoterms 2020, under EXW, the seller has the obligation to clear the export formalities.

Answer 1

Answer 1- True

Explanation- The statement is the correct definition of Incoterms, also known as International Trade Rules. Incoterms determine the conditions for the worldwide exchange of goods and assigns responsibility and costs between the buyer and the seller regarding the trade in goods across international borders.

Answer 2-False

Explanation-According to the Incoterm rule, the products are delivered by the seller to the buyer at the moment when the goods pass the ship’s side at the port of loading. After the goods are loaded, the seller is no longer liable for payment of any damage or loss of goods. These responsibilities are transferred to the buyer from the moment of loading og goods and hence the seller do not need to compensate the buyer.

Answer 3-True

Explanation- According to the Incoterm rule, the seller is responsible for the export clearance and related costs.