Ex works refers to a situation where the seller fulfils their obligation of delivering the goods by making them accessible to the buyer at a location determined by the seller, such as their factory or warehouse. The buyer is accountable for retrieving the goods and covering the costs. Additionally, the buyer assumes the risk of loss once the goods are made available. Abbreviation: EXW
Ex works is a trade term that outlines the responsibilities of both the buyer and seller of goods in terms of delivery, payment, and risk of loss. Under this term, the seller’s delivery is considered complete, and the risk of loss is transferred to the buyer when the goods are made available at a location chosen by the seller, such as their factory, warehouse, or showroom. This means that the buyer is responsible for arranging transportation and loading the goods onto a vehicle. For instance, a Chinese company sells electronics to a buyer in the United States on an ex works basis, where the seller makes the goods available at their factory in China, and the buyer is responsible for arranging transportation and loading the goods onto a truck for shipment to the port. Similarly, a furniture manufacturer in Italy sells chairs to a buyer in Germany on an ex works basis, where the seller makes the chairs available at their warehouse in Italy, and the buyer arranges for a truck to pick up the chairs and transport them to Germany. These examples demonstrate how the ex works trade term works in practice, where the seller is responsible for making the goods available at a specific location, but the buyer is responsible for arranging transportation and assuming the risk of loss once the goods are in their possession. This trade term is widely used in international trade and can help to clarify the responsibilities of both parties in a transaction.
Ex Works (EXW) is an international trade term that means the seller is responsible for making the goods available at their premises, and the buyer is responsible for all transportation costs and risks from the seller’s premises to the final destination.
The buyer is responsible for all transportation costs from the seller’s premises to the final destination.
The seller is responsible for loading the goods onto the buyer’s transportation vehicle at their premises.
The buyer is responsible for arranging and paying for insurance for the goods during transportation.
The buyer is responsible for any damage or loss of the goods during transportation.
Yes, the buyer has the right to inspect the goods before transportation at the seller’s premises.
The seller must provide the buyer with a commercial invoice, packing list, and any other necessary documents for customs clearance.
The payment term in Ex Works is usually cash in advance or a letter of credit.
Yes, the buyer can use their own transportation or arrange for a third-party carrier to transport the goods.
The advantages of using Ex Works include lower costs for the seller, greater control for the buyer over transportation, and flexibility in choosing transportation options.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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