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Question and answer - Assignment Example

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The Incoterm that provides the least amount of risk varies depending on the vantage point.  “Ex Works” provides the least risk for the seller.  This is due to the fact that the buyer is responsible for nine to ten of the eleven charges/fees that are normally associated…
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Download file to see previous pages I think the writer should have tried to explain briefly what Incoterm is in order for the readers who are not well versed to this subject to understand it. As it is, the answer is evasive and does not directly answer the question that has been asked.  
I would have to agree that depending where one falls on the spectrum of the chart (EXW (higher risk to buyer) – DDP (higher risk to seller)), how the transaction is negotiated via contract, decides on the risk one inherits.  With that said, as we have discussed this week regarding documents used in export financing and the terms and conditions expressed in them, some of the risks associated with Incoterms 2010, may be mitigated through the use of these documents and as well as wording added to the sales contracts containing these commercial terms/definitions.  One needs to keep in mind that Incoterms doesn’t specify or involve questions as to title or ownership or deal with breach of contract…these questions/details need to be resolved in specific provisions in the contract.
This part of the answer is vague since it does not directly answer the question. The writer is repeatedly saying “documents” used for exporting. What are these documents? This leaves us with many questions than answers.
Using instruments such as a letter of credit or documentary collection, requirements and stipulations may be added by the banks so that their clients and they are covered barring circumstances when it comes to payment.  It makes sense to me that buyers and sellers would opt for something whereas they meet in the middle.  The seller takes care of costs incurred up to loading goods on method of transportation to import country with the buyer picking up responsibility from there or once loaded on transportation in the exporting country.  Using CIF or CFR rules would make sense as costs and risks are closely split.  Granted as a seller, I have something the ...Download file to see next pagesRead More
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