In the sale of goods, the term “Free on board” (FOB) indicates that the seller will place the goods on a ship at a designated location without any additional charges for packing, shipping, or related expenses. Once this is done, the buyer assumes ownership of the goods and is liable for any potential damage or loss during transportation. The seller is obligated to ship the goods according to the agreed-upon terms, while the buyer must provide any necessary delivery instructions. Additionally, the buyer is required to make payment for the goods upon presentation of the required documents.
FOB, or Free on Board, is a term used in the sale of goods. It indicates that the seller will place the purchased goods on board a vessel for shipment at a specified location without any cost to the buyer for packing, postage, or cartage. At this point, the legal title, rights, and risk of loss transfer from the seller to the buyer. The specified location is typically a transportation depot. For example, if a buyer in New York buys goods from a seller in China with FOB terms, the seller is responsible for shipping the goods to a designated location in China and loading them onto a vessel. Once the goods are on board, the legal title and risk of loss transfer to the buyer, who is responsible for any further transportation costs and risks. The Uniform Commercial Code (UCC) provides specific terms for FOB. According to UCC ยง 2-319, unless otherwise agreed: If the term is FOB the place of shipment, the seller must ship the goods at that place and bear the expense and risk of putting them into the possession of the carrier. If the term is FOB the place of destination, the seller must transport the goods to that place and tender delivery of them. If the term is FOB vessel, car, or other vehicle, the seller must load the goods on board at their own expense and risk. Overall, FOB is a delivery term that specifies the responsibilities of the seller and buyer in the shipment of goods. It is important for both parties to understand the terms and agree upon them before making a purchase or sale.
FOB stands for Free On Board, which is a shipping term used to determine the point at which the buyer assumes responsibility for the goods being transported.
FOB determines who is responsible for the goods during transit and who bears the risk of loss or damage. It also determines who is responsible for the shipping costs.
There are several types of FOB terms, including FOB Origin, FOB Destination, FOB Shipping Point, and FOB Destination Point. Each term specifies when the buyer assumes responsibility for the goods.
FOB Origin means that the buyer assumes responsibility for the goods as soon as they are loaded onto the carrier at the seller’s location. The buyer also bears the shipping costs from that point onwards.
FOB Destination means that the seller retains responsibility for the goods until they reach the buyer’s specified destination. The seller also covers the shipping costs until the goods are delivered.
Yes, FOB terms can be negotiated between the buyer and seller. It is important to clearly define the FOB point and responsibilities in the sales contract to avoid any disputes.
The responsibility for insurance varies depending on the FOB term agreed upon. In FOB Origin, the buyer is typically responsible for insurance, while in FOB Destination, the seller usually covers insurance.
Yes, FOB terms can be used for international shipments. However, it is important to consider any additional legal requirements or international trade regulations that may apply.
If the goods are damaged during transit, the party responsible for the goods at that point (either the buyer or seller, depending on the FOB term) may be liable for the damages. It is important to review the sales contract and any applicable insurance coverage to determine the appropriate course of action.
FOB terms can be modified after the contract is signed, but it requires mutual agreement between the buyer and seller. Any modifications should be documented in writing to avoid any misunderstandings or disputes.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/free-on-board-fob/
- Modern Language Association (MLA):Free On Board (Fob). dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/free-on-board-fob/.
- Chicago Manual of Style (CMS):Free On Board (Fob). dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/free-on-board-fob/ (accessed: May 09 2024).
- American Psychological Association (APA):Free On Board (Fob). dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/free-on-board-fob/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts