GlossaryEN1 min readUpdated: Jun 22, 2026
Delivery terms
Delivery terms are the contractual provisions agreed between seller and buyer that define where and when goods change hands, who bears transport and customs costs, and at what point risk transfers to the buyer.
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Source: https://iccwbo.org/business-solutions/incoterms-rules/
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Incoterms 2020 Simulator: Who bears costs & risk?
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Definition & Explanation
Delivery terms are the contractual provisions agreed between seller and buyer that define where and when goods change hands, who bears transport and customs costs, and at what point risk transfers to the buyer. They simultaneously establish the place of delivery, cost allocation, and transfer of risk. In international trade, delivery terms are frequently standardised through Incoterms—such as FOB, CIF, or DDP—to prevent disputes over interpretation. Freight forwarders, customs authorities, and banks all rely on precisely stated delivery terms to execute contracts correctly and allocate charges without ambiguity—particularly in letter-of-credit transactions. Not to be confused with payment terms, which govern only when and how invoices are settled.
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