FREE ON BOARD

free on board.A mercantile-contract term allocating the rights and duties of the buyer and the

seller of goods with respect to delivery, payment, and risk of loss, whereby the seller must clear

the goods for export, and the buyer must arrange for transportation. • The seller’s delivery is

complete (and the risk of loss passes to the buyer) when the goods pass the transporter’s rail. The

buyer is responsible for all costs of carriage. UCC § 2-319. — Abbr. FOB; F.O.B. Cf. FREE

ALONGSIDE SHIP; DELIVERED EX SHIP. [Cases: Sales 77(2). C.J.S. Sales §§ 96–98.]

“In an F.O.B. (‘free on board’) contract, the goods must be delivered on board by the seller,

free of expense to the purchaser, and they are not at the latter’s risk until actually delivered on

board, when the property in them passes to him. The seller must also give the buyer sufficient

notice to enable him to insure against loss during the sea transit. The buyer, on the other hand,

must name a ship or authorize the seller to select one. The seller cannot sue for the price until the

goods are loaded, and if his inability to load was caused by the buyer’s failure to name an effective

ship, his only remedy lies in damages. Similarly, F.O.R. means ‘free on rail.’ ” 2 E.W. Chance,

Principles of Mercantile Law 86–87 (P.W. French ed., 10th ed. 1951).

FOB destination.A mercantile term denoting that the seller is required to pay the freight

charges as far as the buyer’s named destination. [Cases: Sales 79. C.J.S. Sales § 168.]

FOB shipping.A mercantile term denoting that the seller is required to bear the risk of placing

the goods on a carrier. [Cases: Sales 201(4). C.J.S. Sales §§ 224–227.][Blacks Law 8th]