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ACCA Applied Skills · Corporate and Business Law (Global) · Introduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms

Incoterms 2020 contains eleven rules, divided into two groups. Which description of the groups is correct?

Incoterms 2020 are divided by mode of transport: seven rules usable for any mode or modes, and four rules for sea and inland waterway transport only. The division is not based on consumer or business buyers, nor simply on who pays for carriage.

  1. ARules for any mode or modes of transport, and rules for sea and inland waterway transport onlyCorrect
  2. BRules for sale of goods between businesses, and rules for sale to consumers
  3. CRules where the seller pays for carriage, and rules where the buyer pays for carriage

Explanation

The first group (EXW, FCA, CPT, CIP, DAP, DPU, DDP) suits any mode of transport. The second group (FAS, FOB, CFR, CIF) applies only to sea and inland waterway transport. The division is by transport mode, not by who pays or by type of buyer.

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