NEWS
Trade term - FOB
FREE ON BOARD (FOB)
The seller delivers when the goods pass the ship’s rail at the at the named port of shipment.
This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.
The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport.
If the parties do not intend to deliver the goods across the ship’s rail, the FCA term should be used.
Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery and payment, when the risk of loss shifts from the seller to the buyer, as well as who pays the costs of freight and insurance.The most commonly known trade terms are Incoterms, which are published by the International Chamber of Commerce. These are often identical in form to domestic terms, such as the American Uniform Commercial Code, but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms.It's important to realize that because this is a legal term, its exact definition is much more complicated and differs by country. It is suggested that you contact an international trade lawyer before using any trade term.
The buyer and the seller's rights and duties under FOB term:
Service/Event
Responsibility for Performing
Export Pack
Seller's responsibility
Mark and Label
Seller's responsibility
Export Clearance (License)
Seller's responsibility
Arrange Insurance
Buyer's responsibility
Nominate Main Carrier
Buyer's responsibility
Nominate Export Forwarder
Buyer's responsibility
Arrange Pre-Carriage
Seller's responsibility
Load Pre-Carrier
Seller's responsibility
Unload Pre-Carrier
Seller's responsibility
Load Main Carrier
Seller's responsibility
Stow Main Carrier
Buyer's responsibility
Unload Main Carrier
Buyer's responsibility
Nominate On-Carrier
Buyer's responsibility
Arrange On-Carrier
Buyer's responsibility
Nominate Import Broker
Buyer's responsibility
Load On-Carrier
Buyer's responsibility
Import Clearance (License)
Buyer's responsibility
Pay Destination Duty, Taxes, Fees
Buyer's responsibility
Unload From On-Carrier
Buyer's responsibility
| DOCUMENTS UNDER FOB TERM: | |
| Documents | Responsibility for Preparation |
| Commercial Invoice | Seller's responsibility |
| Packing List | Seller's responsibility |
| Export Declaration | Seller's responsibility |
| Certificate of Origin | Seller's responsibility |
| Precarriage Bill of Lading | Seller's responsibility |
| Export License | Seller's responsibility |
| Other Governmental (EPA/FDA) | Seller's responsibility |
| Main Carriage Bill of Lading | Buyer's responsibility |
| Dock Receipt | Seller's responsibility |
| Insurance Certificate | Buyer's responsibility |
| Import License | Buyer's responsibility |
| On-Carriage Bill of Lading | Buyer's responsibility |
| Entry Documents | Buyer's responsibility |
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