F.O.B. Contract

Definition of F.O.B. Contract

In accordance with the work A Dictionary of Law, this is a description of F.O.B. Contract : (free on board contract)

A type of contract for the international sale of goods in which the seller’s duty is fulfilled by placing the goods on board a ship. There are different types of f.o.b. contract: the buyer may arrange the shipping space and the procurement of a bill of lading and nominate the ship to the seller; he may nominate a general ship and leave it to the seller to place the goods on board and to procure a bill of lading; or the seller may be asked to make all the shipping arrangements for which the buyer will pay. The risk of accidental loss or damage normally passes to the buyer when the goods are loaded onto the ship. Insurance during the sea transit is the responsibility of the buyer. f.o.b. is a defined *incoterm in Incoterms 2000.