The Passing of Risk According to Incoterms® 2010 Rules

Abstract

Within the framework of the principle of freedom of contract, parties can arrangethe details of international sales contracts as they wish. However, the emergence ofdivergence in interpretations is probable with the influence of different legal and eco- nomic systems that countries have, which causes disputes. Depending on this, trans- action costs increase and the development of international trade slows down. There- fore, contracting parties refer to Incoterms®rules issued by the International Chamberof Commerce and widely used in international commercial transactions. The purposeof these rules is, by establishing a standard for the terms used in international trade,to avoid divergence in interpretation and thus to provide legal security and stabilityin international trade. The issue of passing of risk has a particular importance and is regulated exclusivelyin Incoterms® rules. In Incoterms, as a rule, risk passes to the buyer with the deliveryof the goods to him/her. Due to the fact that completion of the delivery differs ac- cording to various Incoterms®rules, the moment of passing of risk varies accordingly.In this study, basically the issue of passing of risk is addressed in line with commercialterms set forth in Incoterms® 2010 rules. Thus, considering the moment of passing ofrisk in accordance with delivery modes, it will be possible for contracting parties tochoose the most appropriate Incoterms® rule