how delivered at place dap works
buyers and sellers often face complications when it comes to trade contracts whether they are in the same country or not as such there are rules and regulations in place that clearly define the roles and responsibilities of each party in a financial contract these are known as incoterms one of which is a delivered at place or dap agreement dap simply means that the seller takes on all the risks and costs of delivering goods to an agreed upon location this means they are responsible for anything associated with packaging documentation export approval loading charges and ultimate delivery the buyer in turn takes over the risk and responsibility for unloading the goods and clearing them for import a delivered at place or dap agreement is applicable for any form or combination of forms of transportation it usually lists the point at which the buyer takes on financial responsibilities such as delivered at place port of oakland the term was introduced in 2010 at that time dap replaced the term delivery duty unpaid ddu while ddu may still be used colloquially dap is now the official term used in international trade 1the opposite of dap is delivered duty paid ddp which indicates that the seller must cover duties import clearance and any taxes dap obligationsthe icc sets out clear obligations for both buyers and sellers for each incoterm below are the key responsibilities of each party the seller is the one who bears most of the responsibilities when it comes to shipping under dap contracts this includes while the seller does bear the brunt of the responsibilities under a dap contract there are certain things to which the buyer must adhere these points include inventory commercial invoicing and export paperworkexport and customs licensingpre carriage loading main carriage and delivery to destinationcost of shipment and any lossesproof of delivery to buyerpayment to sellerimport formalities and paperworkunloading cargoimport duties levies taxestransporting to next locationimportance of incotermsthe icc was founded in 1919 it established the incoterms in 1936 as a way to facilitate domestic and international trade since then the chamber released eight updates of these terms in order to remove obsolete terms delivered at place was one of those simplifications as the definition applies regardless of the method of transport 2the main driver behind the icc and the incoterms is the need for a clear understanding of counterparty responsibilities in international contracts particularly when it comes to who ships what and to where with the icc issuing concrete definitions contracts can refer to the incoterms and the signing parties have a shared understanding of responsibilities even with the clear guidelines for dap arrangements there are still situations that result in disputes such as when the carrier of the goods incurs demurrage a charge for failing to unload in time as a result of not receiving the proper clearance from one of the parties in these cases the fault usually lies with whichever party was amiss in providing timely documentation but determining that can be difficult as documentation requirements are defined by the national and local authorities controlling ports and vary from country to country indeed international trade law can be complex even with the benefit of defined contract terms 