Forward Contract Types

The #Forwardcontract Types have been updated to match the 2020 Incoterms.


These are the contract definitions from the UK government website for import/export. You can set default contract types for purchase orders and forward contracts in the ledger settings, or change on an order by order basis.


Incoterms 2020


EXW - Ex Works

The seller makes the goods available at the seller’s location, so the buyer can take over all the transportation costs and also bears the risks of bringing the goods to their final destination.


FCA - Free Carrier

The seller is responsible for delivery of goods to a named carrier. Responsibility for cost and risk then passes to the buyer.


FOB - Free on Board

The seller is responsible for all costs involved in the process up until the goods are loaded on to a vessel at the named UK port. Once goods have been loaded, the buyer is responsible for any costs and risks involved in the onward shipment.


FAS - Free Alongside Ship

The seller must place the goods alongside the ship at the named UK port. The risk of loss or damage to the goods passes when the goods are alongside the ship, and the buyer bears all the costs from that moment on.


CFR - Cost and Freight

The seller must pay the costs and freight to bring the goods to the overseas port of destination. The buyer pays costs and takes risk from then on.


CIF - Cost, Insurance and Freight

This is the same as CFR. However, the seller must also obtain and pay for the insurance. The default level of insurance cover under CIF is Institute Cargo Clauses (C). This applies to both 2010 and 2020 Incoterms.


CPT - Carriage Paid to

The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.


CIP - Carriage and Insurance Paid to

The seller pays for the carriage and insurance to the named overseas destination point, but risk passes when the goods are handed over to the first carrier. The default level of insurance cover under CIP is Institute Cargo Clauses (A). This is a higher level of cover for CIP than Incoterms 2010, which specified Institute Cargo Clauses (C).


DDP - Delivered Duty Paid

The seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination.


DDU - Delivered Duty Unpaid

The seller is responsible for ensuring goods arrive safely to a destination; the buyer is responsible for import duties. DDU is still commonly used in transportation contracts, even though the International Chamber of Commerce has officially replaced it with the term Delivered-at-Place (DAP).


DAP - Delivered at Place

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place.


DPU - Delivered at Place Unloaded

The exporter arranges carriage and delivery of the goods, ready for unloading at the named place. The seller is required to unload the goods at this destination. After the goods’ arrival, the customs clearance in the importing country needs to be completed by the buyer at his own cost and risk, including payment of all customs duties and taxes. This is a retitling of the Incoterms 2010 term Delivered at Terminal (DAT), making it clear that delivery can happen anywhere, not just at a terminal.


#May2021

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