Instructions $($do not hand in pg$.1-4)$: The Incoterm$$ in a sales contract is used to allocate costs and risks that are included in the Seller$$s selling price to the buyer, and which the Buyer must arrange and pay for. The following diagram illustrates the Costs $($C$)$ for Transportation $($T$)$ and Insurance $($I$),$ and the Risk $($R$)$ of loss arising from damage to the shipment. $$II$$ represents the border between the country of departure and the country of arrival.

D$1$ D$2$ D$3$ II A$1$ A$2$ A$3$

$$

C T C

I

R R

Locations $($named places$)$ in the above are as follows:

D $$ Departure:

D$1$ place of origin; D$2$ terminal or airport of origin; D$3$ inland water or ocean port

A $$ Arrival:

A$1$ inland water or ocean port; A$2$ terminal or airport; A$3$ place of destination

II $$ border between country of departure and country of arrival

Shaded bars $$ show Seller$$s Obligations

Non$-$shaded bars $$ show Buyer$$s responsibility unless otherwise indicated

$($e$.$g$.,$ Insurance is an obligation for the Seller for only two Incoterms$($CIF$,$ CIP$)$; see endnote on Insurance.$)$

$$

Diag. $1$ Incoterm$$ is EXW named place $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I

Buyer$$s Option

R R

Diag. $2$ Incoterm$$ is FCA named place.

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s

Option

R R

Diag. $3$ Incoterm$$ is FOB$/$FAS named port $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s Option

R R

Diag. $4$ Incoterm$$ is CFR named PORT $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s Option

R R

$$

Diag. $5$ Incoterm$$ is CIF named PORT $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s Obligation $($Class C $$ minimum cover only$)$

R R

Diag. $6$ Incoterm$$ is CPT named place $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s Option

R R

Diag. $7$ Incoterm$$ is CIP named place $($Incoterms$2020)$

origin term D port D port A term A destination

$$ II $$

C T C

I Seller$$s Obligation $($Class A $$ all risk insurance$)$

R R

Diag. $8$ Incoterm$$ is DPU named place $($Incoterms$2020)$

origin term D port D port A term A destination

$$