INCOTERM Trade Terms: True or False Quiz

True or False:

'( ) The 11 INCOTERM trade terms not only apply to international trade but also apply to domestic trade.

( ) Under CFR and CPT, it is the seller's obligation to insure the goods.

( ) Under a symbolic delivery term, the seller does not guarantee the arrival of the goods at the named destination.

( ) For the traders domiciled inland, FCA is more advantageous than FOB because with former the risks are transferred much earlier.

( ) If the buyer has no access to export formalities, he should avoid the use of EXW.'

Answers:

False: The first statement is false. The INCOTERM trade terms apply specifically to international trade and do not apply to domestic trade.

True: Under CFR (Cost and Freight) and CPT (Carriage Paid To), it is the seller's obligation to insure the goods.

True: Under a symbolic delivery term, such as EXW (Ex Works), the seller does not guarantee the arrival of the goods at the named destination.

False: For traders domiciled inland, FCA (Free Carrier) may be more advantageous than FOB (Free On Board) because with FCA the risks are transferred earlier, but it ultimately depends on the specific circumstances of the trade.

False: If the buyer has no access to export formalities, they should avoid the use of EXW (Ex Works) as it places the maximum responsibility on the buyer for export documentation and procedures.