Facilitating International Electronic Commerce by Formalising the Incoterms

The Incoterms, international commercial terms, offer a rare example of highly standardised terms for commercial transactions. In this paper we present a logical analysis of the Incoterms. Our analysis shows that there is a rich variety of different cases of deontic and defeasible reasoning in the Incoterms. Most of the rules in the Incoterms are expressed in deontic notions such as obligation, permission and right. Also, most of these rules have a defeasible character in the sense that they hold for the normal case, but can be overruled in exceptional circumstances. The results from this logical analysis could contribute to the discussion about the role of deontic and defeasible logics in the representation of and reasoning about legal domains. We also describe how, based on our logical analysis, a legal advisory system for the Incoterms can be implemented in Prolog. This implementation could be further developed into a legal advisory system that could offer advice to commercial users about the choice of the most suitable Incoterms to include in their commercial contracts.