Explain the different terms of trade

The different terms of trade are as follows :

  1. Cash on delivery : COD is a type of transaction in which payment for goods is made by the buyer at the time of delivery of the goods. This mode of payment is adopted in a transaction in which the buyer does not take delivery of goods at the time of buying but the goods are sent later by the seller to the buyer either through post, transporter or sellers representative.
  2. Free on Board (FOB): FOB is a term of trade under which price of goods is quoted or invoiced by a seller and includes all charges up to placing the goods on board of the transporter specified by the buyers. These charges include packaging cost, cost of transportation to the place of carrier and loading cost.
  3. Cost, insurance and freight : CIF is a term of trade under which price of the goods is quoted or invoiced by the seller which includes all charges for sending the goods to the destination specified by the buyer. Thus, it includes FOB price as well as cost of freight and insurance.
  4. Errors and omissions expected : E and OE at the end of a contractually related document represents disclaimer against clerical error. Thus, the originator of the document has the right to change the incorrect information into a correct information when an inaccuracy in the document has been located.