Define: Fob

A FOB contract is a type of international trade agreement where the seller is responsible for delivering the goods to a specified port or location, and the buyer assumes responsibility for the goods once they are loaded onto the vessel.

The seller’s main obligations in a FOB contract include delivering the goods to the specified port, clearing the goods for export, and loading them onto the vessel nominated by the buyer.

The buyer’s main obligations in a FOB contract include arranging and paying for the transportation of the goods from the seller’s location to the specified port, as well as assuming the risk and responsibility for the goods once they are loaded onto the vessel.

Yes, the buyer has the right to nominate the vessel for transportation in a FOB contract. However, the seller must agree to the nomination unless otherwise specified in the contract.

Typically, the buyer is responsible for insuring the goods during transit in a FOB contract. However, it is important to review the specific terms and conditions of the contract to determine the parties’ insurance obligations.

If the goods are damaged or lost during transit, the risk and responsibility for the goods usually transfer to the buyer once they are loaded onto the vessel. Therefore, the buyer would generally bear the loss unless the damage or loss was caused by the seller’s negligence.

The seller can be held liable for delays in delivering the goods if the delay is a result of their failure to fulfill their obligations under the contract. However, if the delay is due to circumstances beyond the seller’s control, such as a force majeure event, they may be exempt from liability.

Once the goods have been loaded onto the vessel, it is generally not possible for the buyer to cancel the contract unilaterally. However, if both parties agree to cancel the contract, they can negotiate the terms and conditions of the cancellation.

The seller cannot unilaterally change the destination port specified in the contract without the buyer’s consent. Any changes to the destination port would require mutual agreement between the parties.

FOB contracts are subject to the laws and regulations of the countries involved in the transaction. It is important to consult with legal professionals familiar with international trade laws to ensure compliance with all applicable requirements.