Delivery diagrams represent visually key aspects of the terms of delivery of goods. For example, it illustrates when and where delivery takes place and when the cost and risk are transferred.
Parties entering a contract for the sale and purchase of goods need to choose their terms for delivery. “Delivery” may mean many things, not only shipment or arrival, but also placing the goods onboard a carrier or other alternatives. The choices affect how the cost, risk, and responsibility for loading, unloading, customs duties, taxes, and other matters are divided between the parties. Misunderstanding the meaning attributed to “delivery” can lead to mismanaged expectations, delays, extra costs, and even damages to the goods.
The delivery diagram can be used to disambiguate and summarize delivery clauses – either the parties rely on International Chamber of Commerce published Incoterms® rules, other standard delivery clauses, or bespoke arrangements.
The delivery diagram illustrates precisely what delivery means: where it happens, how, and in which moment in time and space various responsibilities pass. When applied to standard rules, like Incoterms®, it allows to explain and compare the essence of the various trade terms in a simple way. When applied to non-standard delivery terms, its familiar format helps the parties to plan and agree on how delivery should take place.
© 2019 Stefania Passera, Helena Haapio, and WorldCC