The Role of Incoterms Knowledge in Reducing Trade Disputes Among Nigerian Export SMEs

This study investigates the level of Incoterms knowledge among Nigerian export-oriented small and medium enterprises and examines the relationship between Incoterms literacy and the frequency of international trade disputes experienced by these firms. Incoterms, the internationally standardised trade terms published by the International Chamber of Commerce, define the obligations, risks, and costs of buyers and sellers in international commercial transactions. Misapplication or misunderstanding of Incoterms clauses is a documented source of trade disputes, financial losses, and damaged buyer-seller relationships in international commerce. The research employs a survey design with data collected from 90 SME export managers and proprietors across Lagos and Kano who have conducted international trade transactions within the past three years. Structured questionnaires measure Incoterms knowledge levels using scenario-based assessment items and collect data on the frequency and nature of trade disputes experienced. Descriptive statistics and chi-square tests are applied. The theoretical framework draws on the information asymmetry theory of contract compliance and the SME internationalisation literature. The study also examines the sources from which Nigerian SME exporters acquire Incoterms knowledge and the adequacy of current trade education and training provision. Findings are expected to reveal a significant negative relationship between Incoterms knowledge and trade dispute frequency, with the majority of surveyed SMEs demonstrating limited proficiency in key Incoterms clauses. Recommendations include mandatory Incoterms modules in export business training programmes delivered by the Nigerian Export Promotion Council and integration of Incoterms literacy assessment into export readiness certification frameworks. Keywords: Incoterms, trade disputes, SMEs, export knowledge, Nigeria