Transportation Operations LINCS Practice Exam

In which of the international commercial terms does ownership of goods pass from seller to buyer?

1. All 11

2. None of the 11

3. Cost, insurance, freight and free on board

4. Carriage paid to

The correct answer is: All 11

The concept of ownership transfer in international commercial terms, commonly known as Incoterms, is crucial for defining the responsibilities and liabilities of sellers and buyers in international trade. Under these terms, ownership of goods can pass from the seller to the buyer depending on the specific Incoterm used. When considering the question, it is important to note that all eleven Incoterms address the transfer of ownership at some stage during the transaction process, with each term indicating specific obligations related to the delivery of goods, transportation, insurance, and customs clearance. For example: - Cost, Insurance, and Freight (CIF) indicates that the seller pays for transportation costs and insurance but does not specify when ownership passes. - Free on Board (FOB) specifies that ownership typically transfers once the goods are loaded onto the vessel at the port of shipment. - Carriage Paid To (CPT) signifies that the seller pays for transportation but ownership transfer may occur earlier in the process at an agreed point. Therefore, the answer that all eleven Incoterms allow for the transfer of ownership is accurate. Each term lays out a framework for when and how ownership shifts in the transaction, emphasizing that it is a fundamental aspect of international trade agreements. This understanding is critical for parties involved