Is well known that thanks to the development and exponential growth of technologies, communications, and social relations, international commerce has had an impact on the commercial and labor world, Costa Rica is not the exception. Therefore, the need arises to find ourselves updated and advised on the matter in order to achieve success in the exchanges that we want to carry out. One of the commercial contracts with the greatest movement in our country is the international sale. This is a tool that allows two people to generate an economic exchange, where one is known as an importer and the other as an exporter. The international sale always goes hand in hand with the INCOTERMS because they help us determine important concepts and terms of the agreement.

So, INCOTERMS will be our right hand when we are talking about international exchanges. INCOTERMS comes from the abbreviation of “International Commerce Terms”. These terms were created by the International Chamber of Commerce as a response to the problems of international trade caused by the different interpretations of each country when establishing commercial relations.

We could say that they were originated with the need to meet certain objectives:

● Establish the rules that determine the rights and obligations of exporters and importers.

● Facilitate international trade operations. How? Helping the parties understand the terms of the trades they are making.

● Unite commercial concepts to avoid confusion and problems that end into judicial processes.

Although the use of INCOTERMS is not mandatory, they are very important because they will determine the moment of effectiveness of the sale, regarding the rights and obligations of both parties. We can also use them as a tool to determine criteria that facilitate business transactions such as:

1. The distribution of expenses.
2. Place and delivery of merchandise
3. The transmission of risk.
4. Customs formalities.

This matter, in addition to being important, requires proper legal advice. Not only to know what each INCTOERM means, but also to know which one should be applied in the specific case, since there are currently 11, and we must know which one adjusts best to our transaction in order to obtain the best benefits and guarantees in the economic exchange. There are, for example, “exit” INCOTERMS such as Ex Works, Free Carrier, and Free on Board, that establish that the transfer of ownership of the sale takes place at some point in the country of origin. We have the “arrival” ones, such as Delivery at Place, which, as its word says established that the transfer of ownership takes place in the country of arrival.

But why is it so important to be advised on this matter? Mostly because the majority of the INCOTERMS are not regulated in our Costa Rican legislation. On the contrary, it is an international matter that is contemplated in an international instrument. Therefore, we need an in-depth study and an excellent legal and commercial analysis so that when we want to make an international transaction of this type, we have the necessary knowledge and tools provided by an expert in the field.

If you require legal advice on what types of INCOTERMS exist, how to know which one to apply depending on the operations you are carrying out, the rights and obligations that originate from its application, the impact on Costa Rica in both commercial and labor matters and the protection of these rights during the contractual relationship, at ERP Lawyers we have a team of experts who can guide you and provide all the necessary legal advice regarding this matter. We invite you to contact us by email: info@erplawyers.com.