What is the term for the condition of sale 'FOB'?

What is the term for the condition of sale 'FOB'?

• A. Free on board; seller pays freight to named FOB port. Title transferred at FOB point
• B. Final order below; pricing includes all fees until delivery
• C. Full ownership burden; requires pre-payment for all shipping costs
• D. Freight on board; buyer assumes responsibility upon loading

Answer: (A)

The term 'FOB' stands for 'Free on Board,' and it refers to a specific condition of sale that clarifies when ownership and responsibility for the goods transfer from the seller to the buyer. In this case, the correct answer highlights that the seller covers freight costs to the specified FOB port and that the title for the goods is transferred at the FOB point. This means that once the goods are loaded onto the cargo ship or transport vehicle at the named location, the buyer assumes responsibility for the shipment. The seller's obligation is fulfilled once the goods have reached the designated FOB port, marking a clear point of transfer for both ownership and liability. The importance of this term in shipping contracts is crucial for calculating costs and understanding risks associated with transporting goods. The other options do not accurately represent the definition of FOB, either by misrepresenting the financial responsibilities of the seller and buyer or by using terminology that does not align with the standard use of FOB in shipping and logistics.

The term 'FOB' stands for 'Free on Board,' and it refers to a specific condition of sale that clarifies when ownership and responsibility for the goods transfer from the seller to the buyer. In this case, the correct answer highlights that the seller covers freight costs to the specified FOB port and that the title for the goods is transferred at the FOB point.

This means that once the goods are loaded onto the cargo ship or transport vehicle at the named location, the buyer assumes responsibility for the shipment. The seller's obligation is fulfilled once the goods have reached the designated FOB port, marking a clear point of transfer for both ownership and liability. The importance of this term in shipping contracts is crucial for calculating costs and understanding risks associated with transporting goods.

The other options do not accurately represent the definition of FOB, either by misrepresenting the financial responsibilities of the seller and buyer or by using terminology that does not align with the standard use of FOB in shipping and logistics.