INCOTERMS EXAM QUESTIONS AND
ANSWERS
EXW - answer- Ex works;
minimum responsibility on the part of the seller; seller must make the goods
available at his place of business or any other point named in the contract; buyer has
to arrange for all transport and customs clearance; seller is not required to load the
goods, but usually does so anyway.
FAS - answer- Free Alongside Ship;
seller delivers the goods on the quay alongside the designated sea vessel;
exclusively a maritime term; seller must clear goods for export.
FOB - answer- Free on Board;
transfer of risk occurs when the goods pass the ship's rail. Seller takes care of export
clearance, buyer takes care of transport and import clearance. Exclusively a
maritime term.
FCA - answer- Free Carrier;
seller must deliver the goods, cleared for export, into the custody of the carrier
arranged by the buyer. Buyer pays for the main international transport. Used for all
modes of transport.
CFR - answer- Cost and Freight;
Cost and Freight; seller must deliver the goods onto the designated vessel in the port
of loading, and pay the freight to the port of destination. Exclusively for maritime
shipment.
CIF - answer- Cost, Insurance and Freight;
Like CFR, but seller must also procure an insurance policy for 110% of the value of
the goods for the buyer. The insurance required is minimum and does not cover
losses by pilferage nor damages resulting from strikes or war (although the parties
may agree to have more complete insurance). Exclusively for maritime shipment.
CPT - answer- Carriage Paid To... (named places);
Like CFR, but not restricted to maritime use; seller delivers into custody of carrier,
pays freight to point of destination.
CIP - answer- Carriage and Insurance Paid to...(named place);
Like CPT, but seller must procure insurance policy for 110% of the value of the
goods; suitable for all modes of transport.
DAF - answer- Delivered at Frontier;
all responsibilities evenly split at delivery point on border between two countries
(generally road/rail transport).
DES - answer- Delivered Ex Ship;
ANSWERS
EXW - answer- Ex works;
minimum responsibility on the part of the seller; seller must make the goods
available at his place of business or any other point named in the contract; buyer has
to arrange for all transport and customs clearance; seller is not required to load the
goods, but usually does so anyway.
FAS - answer- Free Alongside Ship;
seller delivers the goods on the quay alongside the designated sea vessel;
exclusively a maritime term; seller must clear goods for export.
FOB - answer- Free on Board;
transfer of risk occurs when the goods pass the ship's rail. Seller takes care of export
clearance, buyer takes care of transport and import clearance. Exclusively a
maritime term.
FCA - answer- Free Carrier;
seller must deliver the goods, cleared for export, into the custody of the carrier
arranged by the buyer. Buyer pays for the main international transport. Used for all
modes of transport.
CFR - answer- Cost and Freight;
Cost and Freight; seller must deliver the goods onto the designated vessel in the port
of loading, and pay the freight to the port of destination. Exclusively for maritime
shipment.
CIF - answer- Cost, Insurance and Freight;
Like CFR, but seller must also procure an insurance policy for 110% of the value of
the goods for the buyer. The insurance required is minimum and does not cover
losses by pilferage nor damages resulting from strikes or war (although the parties
may agree to have more complete insurance). Exclusively for maritime shipment.
CPT - answer- Carriage Paid To... (named places);
Like CFR, but not restricted to maritime use; seller delivers into custody of carrier,
pays freight to point of destination.
CIP - answer- Carriage and Insurance Paid to...(named place);
Like CPT, but seller must procure insurance policy for 110% of the value of the
goods; suitable for all modes of transport.
DAF - answer- Delivered at Frontier;
all responsibilities evenly split at delivery point on border between two countries
(generally road/rail transport).
DES - answer- Delivered Ex Ship;
