Many Italian companies favour the EXW – Ex Works term because, at least from a commercial perspective, it allows transport costs and risks to be transferred to the buyer at an early stage.

However, the EXW clause does not exhaust the issue of liability connected with the delivery of the goods. Where the seller materially intervenes in the loading operations, liabilities may arise that go beyond the allocation of costs and risks under the Incoterms.

Indeed, Incoterms govern obligations, costs and the transfer of risk under the sale contract, but they do not replace either the contract of carriage or the legal obligations imposed on those involved in the operational phase of handling and transport.

EXW: what it actually governs

According to the ICC formulation, under EXW the seller fulfils its obligation by placing the goods at the buyer’s disposal at its premises or at another agreed place. In the “pure” form of the clause, the seller is not required to load the goods onto the vehicle sent by the buyer: such activity remains at the buyer’s cost and risk.

Not surprisingly, the ICC itself considers EXW a rule generally better suited to domestic trade and suggests carefully assessing the use of FCA where the goods are destined for export or where the seller, even in practice, takes part in delivery to the carrier.

Sale contract and contract of carriage: distinct legal frameworks

From a legal standpoint, one key principle must be kept firmly in mind: the sale contract and the contract of carriage are distinct and autonomous.

The fact that an EXW term is included in the sale contract does not automatically alter the content of the transport relationship, nor does it neutralise the liabilities that the law attributes to those who materially take part in the logistics operations.

In other words, the allocation of “commercial” risk between seller and buyer does not necessarily coincide with the allocation of liabilities arising from the actual performance of the transport.

The operational issue: EXW goods “in fact loaded” by the seller

The critical issue arises where, notwithstanding the EXW clause, the seller physically loads the goods onto the buyer’s vehicle or onto the vehicle of the carrier appointed by the buyer.

In such circumstances, Legislative Decree No. 286/2005 becomes relevant. It identifies the loader as the party who delivers the goods to the carrier and arranges their placement on the vehicle, assigning to that party specific responsibilities, particularly with regard to maximum load limits and the proper securing and arrangement of the cargo.

It follows that mere reliance on the EXW clause is not in itself sufficient to exclude liability where the seller concretely intervenes in the loading phase. In addition, where such operations are carried out at the seller’s premises, the usual obligations relating to health and safety at work, cooperation and coordination among the parties involved may also apply.

The central point is therefore this: the Incoterm governs the commercial relationship between the parties; regulatory liability derives from the activity actually performed.

Where the seller takes care of the loading, a mere reference to EXW is not sufficient to exclude the relevance of the obligations arising under road haulage rules and, more generally, under the provisions aimed at protecting road safety.

Operational implications

From an operational standpoint, it is essential to avoid any misalignment between the contractual framework and business practice.

If the seller does not intend to assume any role in the loading phase, EXW must be applied strictly. If, on the other hand, loading is normally carried out by the seller or at the seller’s premises by its own personnel, it may be advisable to adopt a more appropriate delivery term, such as FCA.

Even where EXW is retained, it remains advisable to regulate with precision the most sensitive operational aspects, including carrier access, vehicle suitability, weight limits, stowage methods, allocation of responsibilities and safety procedures.

Conclusions

The EXW clause does not mean that transport is “outside the seller’s radar”. It simply means that, under the sale contract, commercial costs and risks pass to the buyer at an early stage.

However, where the seller delivers the goods to the carrier and takes care of their placement on the vehicle, it enters an area of responsibility that Italian law governs independently. This is precisely the point that many companies, in practice, tend to underestimate: not so much the abstract wording of the Incoterm, but rather the legal consequences of the actual loading activity.

 

Authored by Avv. Iolanda Cavallo, Associate – iolanda.cavallo@studiozunarelli.com