Incoterms are a set of international rules that define the rights and obligations of the seller and the buyer in a foreign trade transaction. They were developed by the International Chamber of Commerce (ICC) to provide clarity and uniformity in trade negotiations.

Incoterms are divided into four groups, according to the place where the goods are delivered to the buyer:

• Group E: Delivery to the seller's location (Ex Works)
• Group F: Delivery to the seller's location, but with freight paid (Free on Board, Free Alongside Ship, Free Carrier)
• Group C: Delivery to the buyer's location, but with freight paid (Carriage Paid To, Carriage and Insurance Paid to)
• Group D: Delivery to buyer's location (Delivered at Frontier, Delivered Duty Paid, Delivered Duty Unpaid)

Each Incoterm has its own specific rules, which define the following aspects of the transaction:

• Delivery point: Place where the merchandise is delivered to the buyer.
• Freight payment: Who pays the freight for transporting the goods.
• Insurance payment: Who pays for the insurance of the goods during transport.
• Risks: When the risks of loss or damage to merchandise are transferred from the seller to the buyer.

Incoterms are important for companies carrying out foreign trade because they provide a set of clear and uniform rules that can be used to negotiate international contracts. They help avoid conflicts and ensure that both parties to the transaction are aware of their responsibilities.