FOB delivery terms
FOB – “Free on board” Interpretation of the port designated shipping translates as “free on board” The port of the designated shipping means that the seller has completed delivery of the goods when it is on board the ship at the port designated shipping.
The term FOB can only be used for the transport of goods by sea or for internal transport.
Risk and liability sharing on FOB terms
When the goods are fully on board, the risk of loss or damage to the goods under the terms of FOB passes to the seller, and from that moment all costs are borne by the buyer. The main responsibility of the seller is to deliver the goods to the designated port and load it on a ship rented by the buyer. FOB prices, terms of payment, and transfer of ownership
FOB price refers to the price of the contract (invoice or customs of the goods, including the cost of the goods, the amount to the customs clearance, the export of this product with payment of export duties and other costs, as well as the cost of the delivery to the port of shipment and loading of the goods). The delivery terms of Incoterms FOB do not determine the price and payment of the goods and do not regulate the consequences of the transfer of ownership of the goods or infringement. The price and transfer of ownership must be determined in the terms of the purchase and sale agreement. Fob incoterms specify which party of the contract of sale must perform the necessary actions, transportation and customs clearance, when and where the seller transfers the goods to the buyer, as well as the costs incurred by the parties.