Free on board (…… Named port of shipment)
What is FOB Incoterm?
FOB (free on board, free on board) is one of the price terms in international trade. As long as the seller delivers the goods to the carrier designated by the buyer at the designated place and time, and handles the export customs clearance procedures, the delivery will be completed. The choice of place of delivery has an impact on the obligation to load and discharge goods at that place. If the place of delivery is the place of the Seller, the obligation to deliver is deemed to have been fulfilled when the goods are loaded on a means of transport provided by a carrier nominated by the Buyer or by another person acting on behalf of the Buyer; Otherwise, the obligation of delivery shall be deemed to have been fulfilled when the goods are on the means of transport of the Seller and have not yet been discharged into the care of a carrier or other person designated by the Buyer, and the Seller shall not be responsible for discharging the goods. This term is limited to sea transport and inland waterway transport.
If the parties do not intend to deliver across the ship’s rail, the FCA term shall be used.
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A: Seller’s obligations B: Buyer’s obligations
A1 supplies the goods in accordance with the contract
The Seller must provide the goods and commercial invoices or equivalent electronic messages in conformity with the contract of Sale and any other evidence of conformity as may be required by the contract.
B1 Payment of the price
The buyer must pay the price in accordance with the sales contract.
A2 Licenses, other permits and procedures
The Seller must obtain, at his own risk and expense, any export licence or other official permission and, where necessary, complete all customs formalities required for the export of the goods.
B2 Permits, other permits and procedures
The Buyer must obtain, at his own risk and expense, any import licence or other official permission and, where necessary, complete all customs formalities necessary for the importation of the goods and, if necessary, for transit from other countries.
A3 Transport contract and insurance contract
- A) Contract of carriage
- B) Insurance contract
B3 Contracts of transport and insurance
- A) Contract of carriage
The buyer must, at his own cost, enter into a contract for the carriage of the goods from the named port of shipment.
- B) Insurance contract
The Seller must deliver the goods within the agreed date or time on board the vessel nominated by the Buyer at the named port of shipment in accordance with the customary manner at the port.
B4 take delivery of goods
The buyer must take delivery of the goods when the seller delivers in accordance with A4.
A5 Risk transfer
Except as provided in B5, the Seller shall bear all risks of loss of or damage to the goods until the goods have passed the ship’s rail at the named port of shipment.
B5 Risk transfer
The Buyer shall bear all risks of loss of or damage to the goods as follows:
When the goods pass the ship’s rail at the named port of shipment; And the buyer did not notify the seller in accordance with B7, or its designated vessel did not arrive on time, or did not receive the goods, or in accordance with B7 notice ahead of time to stop loading, since the agreed date of delivery or delivery as of the date of expiration, but as the goods have been formally under a contract, that is clearly drawn or otherwise identified as the contract goods is limited.
A6 Cost division
Except as provided in B6, the Seller must pay
All expenses relating to the goods up to the time when they have passed the ship’s rail at the named port of shipment; And all customs duties, duties and other fees payable when the goods are exported.
B6 Cost division
The Buyer must pay all charges in connection with the goods from the time they pass the ship’s rail at the named port of shipment; And on the ships did not arrive on time as designated by the buyer, or did not receive the goods, or in accordance with B7 notice ahead of time to stop loading, not in accordance with regulations of the B7, give the seller or the buyer of the corresponding notice what was happening in the additional costs, but as the goods have been formally under a contract, that is clearly drawn or otherwise identified as the contract goods is limited; And all customs duties, duties and other charges payable on the importation of the goods when customs formalities are required, as well as customs formalities fees, and expenses for transit of the goods from other countries.
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