Incoterms® (International Commercial Terms) are a set of rules for the specification of commonly used contractual commercial terms in foreign trade. They were first developed and implemented by the International Chamber of Commerce (ICC) in 1936. The present version is Incoterms® 2010 (7th revision).
Incoterms are primarily intended to regulate how goods are delivered. They specify the division of costs relating to freight, insurance coverage, import and export duties etc. and also regulate the question of the transfer of risk from the seller to the purchaser.
Agreeing Incoterms in purchase agreements avoids, or at least significantly limits, differing interpretations of commercial terms in different countries.