Ch5Price1234LearningObjective:5understandthestructureofthepriceclauseintheS/CunderstandthepricingmethodsunderstandtheobligationsofboththesellerandthebuyerunderthekeypricetermsundertheINCOTERMS2010understandthepricecompositionandtheconversionmethodsunderstandthepricewithcommission/discountandthenetpricethepriceclausetheunitpricethetotalamountsomeotherinformation5.1PriceTerms&therelatedCustoms&Practices1thepartiesconcernedhavetotakethefollowingaffairsintoconsiderationduringthebusinessnegotiationhowtotransportthegoodsfromthesellertothebuyer234whobearstheobligationtoclearthegoodsforexportorimportandpaytherelateddutieswhodeliversthegoodsonboardthetransporttoolswhobearstherisksoflossesofordamagetothegoodsduringthecarriageConceptofPriceTermsThepricetermsareaseriesofshorttermsorabbreviations,suchasFOB,FCAetc,whichareusedtoexplainthepricecomposition,todefinethemethodofdeliveryofthegoodssold,toindicatewhichpartybearsthefreight,insuranceand/orotherrelevantcharges,andassumetheliabilitiesincaseofdamagetoorlossesofthegoods.Inpractice,thepricetermshaveplayedgreatrolesininternationaltradeasfollows:tonametheexactpointatwhichtheownershipofthemerchandiseistransferredfromthesellertothebuyer;todefinetheresponsibilitiesandexpensesofboththesellerandthebuyer.Consideringthis,tostandardizethemisveryimportant.Thus,cametheinternationalcustoms&practicesonPriceTerms.5.1.1Customs&PracticesonPriceTerms010203Therearethreemostwidelyusedinternationalcustomsandpractices,theyareasfollows:Warsaw-OxfordRules,1932RevisionRevisedAmericanForeignTradeDefinition,1941revisionInternationalRulesfortheInterpretationofTradeTerms(1) Warsaw-OxfordRules,1932RevisionItwasworkedoutbytheInternationalLawAssociationin1928,whichwascalled“WarsawRules1928”;in1932,itwasrevisedinOxfordandthenrenamed“Warsaw-OxfordRules1932”.ButitistheUniformRulesforjustforCIFSalescontract.ThefullnameofCIFisCost,InsuranceandFreight,CIFinbrief.(2) RevisedAmericanForeignTradeDefinition,1941revision9Americancommercialgroupsdrewitupin1919andnamedit“TheU.S.ExportQuotationsandAbbreviations”,thenreviseditin1941andrenamedit:“RevisedAmericanForeignTradeDefinition1941Revision”.QuitedifferentfromWarsaw-OxfordRules,therearesixtradetermsinit,i.e.,Ex-pointoforigin,FOB,FAS,C&F,CIFandEx-Dock.(2) RevisedAmericanForeignTradeDefinition,1941revisionHowever,theexplanationsfortheobligationsofboththeexporterandtheimportersaresospecialandquitedifferentfromtheonewhichiswidelyusedintheworld,thatis:InternationalRulesfortheInterpretationofTradeTerms(3) InternationalRulesfortheInterpretationofTradeTermsThisonewasmadebytheInternationalChamberofCommerce

(ICC).5.1.2InternationalRulesfortheInterpretationofTradeTerms(1) WhatisICC?ICCwasfoundedintheaftermathoftheFirstWorldWarwhennoworldsystemofrulesgovernedthetrade,investment,financeorcommercialrelations.Itswebsiteaddressisasfollows:/1ExceptfortheINCOTERMS,theICChasalsomadesomeotherpopularcustomsandpracticesforthepayment,arbitrationetc.toservetheinternationaltrade,thereare:UniformCustomsandPracticesforDocumentaryCredit(UCPinbrief),2007edition,UCP600.Justasitnamesays,itisakindofcustomsfordocumentarycredit,orLetterofCredit.ExceptfortheINCOTERMS,theICChasalsomadesomeotherpopularcustomsandpracticesforthepayment,arbitrationetc.toservetheinternationaltrade,thereare:UniformRulesforCollection(URCinshort)etc.,1995edition,URC522ThisoneisanothercustomsandpracticesonCollection.Collectionisalsoakindofpaymentmethods,inwhichtheexporterfillsoutthedocumentsaccordingtothesalescontract,presentsthemtoabankinhisowncountry,andaskthebanktohelphimtocollectthepaymentfromthebuyer.URC522servesforthecollection.23ExceptfortheINCOTERMS,theICChasalsomadesomeotherpopularcustomsandpracticesforthepayment,arbitrationetc.toservetheinternationaltrade,thereare:ArbitrationRules,2017edition4MediationRules,2014edition

Mediationisakindofmethodstosettlethedisputes,itisbetweenthefriendlynegotiationandthearbitration.......(2) TheAimsandContentsoftheINCOTERMS“Incoterms”isaregisteredtrademarkoftheICC.Withaseriesofthree-lettertradeterms,suchasFOB,CIF,etc.Relatedtocommoncontractualsalespractices,theIncotermsrulesareintendedprimarilytoclearlycommunicatethetasks,costs,andrisksassociatedwiththeglobalorinternationaltransportationanddeliveryofgoods.(2) TheAimsandContentsoftheINCOTERMSThefirstworkpublishedbytheICConinternationaltradetermswasissuedin1923,withthefirsteditionknownasIncotermspublishedin1936.TheIncotermsruleswereamendedin1953,1967,1976,1980,1990,and2000,withtheeighthversion-Incoterms2010,havingbeenpublishedonJanuary1,2011.ItisreportedthattheICChasbeguntheconsultationsonanewrevisionofIncoterms.(3) INCOTERMS2010

Quitedifferentfromitslastedition,INCOTERMS2000,inwhichthereare13kindsoftradetermsinfourgroupsasfollows:-GroupE(ExWorks)-GroupF(FCA,FAS,andFOB)-GroupC(CFR,CIF,CPTandCIP)-GroupD(DAF,DES,DEQ,DDUandDDP).](3) INCOTERMS2010

Incoterms2010onlydefines11rules.Fourrulesofthe2000version("DeliveredatFrontier";DAF,"DeliveredExShip";DES,"DeliveredExQuay";DEQ,"DeliveredDutyUnpaid";DDU)wereremoved,andarereplaced