New code: New standard international trading terms published for businesses selling overseas
UK businesses buying and selling goods overseas will welcome a new 2020 edition of INCOTERMS – internationally recognised standard trading terms – for use by businesses making overseas sales, which comes into effect on 1 January 2020.
This update was published in Legal Alert - September 2019
Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.
If you are exporting, using INCOTERMS (standard trading terms published by the International Chamber of Commerce used extensively by businesses trading abroad) minimises the risk of ambiguities or omissions in sales contracts with your overseas customers.
Businesses trading from and with the UK may be particularly interested in these user-friendly terms given the uncertainties a no-deal Brexit may create when trying to determine whether it is the buyer or seller who is responsible for costs, tariffs, and other risks and responsibilities on export or import of goods from or to the UK.
However, INCOTERMS are not a complete solution, for example, they do not cover termination or what happens on insolvency. Also, local laws in some territories can still mean that some INCOTERMS are not fully effective or can lead to uncertainty if there is a dispute.
- If you do not currently use INCOTERMS, take specialist advice on whether they are appropriate for your business.
- If you do, ensure sales contracts entered into now expressly say which INCOTERMS apply.
- Take specialist legal advice on the changes you need to make to your contractual documentation to take account of the new INCOTERMS.
- Particularly, take advice on the application of each INCOTERM in relation to sales to your target territories.
- Make sure your sales and other staff, and customers are aware of the changes made.
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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