What is an ex works contract?

Asked By: Modou Saburido | Last Updated: 27th February, 2020
Category: business and finance logistics
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Ex Works Law and Legal Definition. Ex Works is a commonly used term in international sales contracts. Under an ex works sale contract, the seller undertakes to have the goods available for collection by the buyer at the seller's premises, for instance, factory, warehouse or mine.

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Keeping this in consideration, what ex works means?

Ex works (EXW) is an international trade term that describes when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs.

Likewise, what does EXW shipping terms mean? EXW: Ex Works. The seller makes the goods available at their premises, or at another named place. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a buyer incurs the risks for bringing the goods to their final destination.

Similarly, what is the difference between FOB and ex works?

However, the difference between the two is clear: Using EXW, you are responsible for all costs associated with your transport to the UK, whereas, with an FOB agreement, you are only accountable for the costs that come after your goods have boarded the ship (or aircraft), as your supplier is responsible for the local

Does ex works include packaging?

Ex Works (EXW) This rule places minimum responsibility on the seller, who merely has to make the goods available, suitably packaged, at the specified place, usually the seller's factory or depot. Although the seller is not obliged to load the goods, if the seller does so, this is at the buyer's risk!

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What is the difference between ex works and FCA?

Let us compare FCA with ex works terms of delivery. In terms of delivery Ex-works, the seller delivers goods to the buyer at his (seller's) premises. However, in terms of FCA delivery, the export cleared goods are delivered by the seller to the carrier at the named and defined location mentioned in the contract.

What does ex works mean on an invoice?

"Ex works" means that the seller fulfils his obligation to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc) to the buyer. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.

What is FOB and CNF?

But the main decision requiring active involvement of all parties is shipments. There are two major terms of shipment widely used round the globe. These are freight on board (FOB) and cost net freight (CNF). A prepaid basis shipment means the buyer will pay the freight charges before the shipment occurs.

What is difference between FOB and CIF?

The major difference between FOB and CIF is when liability and ownership transfers. In most cases of FOB, liability and title possession shifts when the shipment leaves the point of origin. With CIF, responsibility transfers to the buyer when the goods reach the point of destination.

What is FOB price?


Free On Board, in short FOB, is a term frequently used in shipping terms where the seller quotes a price including the cost of delivering goods to the nearest port. FOB is a price that the buyer pays for the product excluding any of the following costs: Loading. Insurance. Freight.

What is CFR mean?

Cost and freight

Who pays the freight on FOB?

FOB Destination, Freight Prepaid: The seller/shipper pays all the shipping costs until the cargo arrives at the buyer's store. The buyer does not pay any shipping costs. FOB Destination, Freight Collect: The receiver of goods (the buyer) pays the freight charges upon delivery of the goods.

How is CIF calculated?

CIF (Cost, Insurance, Freight) value is the total value of “Invoice value + Insurance + Freight + Ex-work charges (If any)”. Note:- The above calculation is for FOB & Ex-Work shipments.

What does CIF mean?


costs, insurance, and freight

How does FOB shipping work?

Indicating "FOB port" means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays the cost of marine freight transport, insurance, unloading, and transportation from the arrival port to the final destination.

What does FCA mean?

Free Carrier

What does DDP mean?

Delivered Duty Paid

What is FOB origin vs FOB destination?

Origin” term of sale or an “F.O.B. Destination” term of sale is that the price of the goods sold in an “F.O.B. Destination” contract is a “delivered price” where the cost of transportation is “built in” to the price. Origin” contract does not include a charge for transporting the goods from the seller to the buyer.

What does delivery terms ex works mean?


EXWEx Works (named place of delivery)
The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller. EXW means that a buyer incurs the risks for bringing the goods to their final destination.

What does ex factory price mean?

ex factory. Applied to a price, this means the price at the factory, and does not include any other charges, such as delivery or subsequent taxes. Also called ex mill.

What are the different shipping terms?

Types of Incoterms
  • CIF (Cost, Insurance and Freight)
  • CIP (Carriage and Insurance Paid to)
  • CFR (Cost and Freight)
  • CPT (Carriage paid to)
  • DAT (Delivered at Terminal)
  • DAP (Delivered at Place)
  • DDP (Delivery Duty Paid)
  • EXW (Ex Works)