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 has to 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. "Il" represents the border between the country of departure and the country of arrival. D1 D2 D3 A1 A2 A3 CI ! 20 R Locations (named places) in the above are as follows: D-Departure: D1 place of origin; D2 - terminal or airport of origin, D3 - inland water or ocean port A- Arrival: A1 - inland water or ocean port; A2 - terminal or airport; A3 - place of destination 11 - 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. 3 - Incoterm is FOB/FAS named port (Incoterms 2020) origin term D port D port A term A destination II CT | 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 CT | Seller's Option R R 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 has to 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. "Il" represents the border between the country of departure and the country of arrival. D1 D2 D3 A1 A2 A3 CI ! 20 R Locations (named places) in the above are as follows: D-Departure: D1 place of origin; D2 - terminal or airport of origin, D3 - inland water or ocean port A- Arrival: A1 - inland water or ocean port; A2 - terminal or airport; A3 - place of destination 11 - 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. 3 - Incoterm is FOB/FAS named port (Incoterms 2020) origin term D port D port A term A destination II CT | 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 CT | Seller's Option R R
