Fob

In legal transactions, 'FOB' stands for 'Free On Board' and indicates the point at which ownership and financial responsibility for goods transfer from the seller to the buyer. It is commonly used in shipping and sales contracts to define the specifics of liability during transport.

The term originated in maritime law, where it was crucial to delineate the responsibilities and risks associated with the transport of goods at sea. Legal documents began incorporating this term to clarify the obligations during shipping transactions.

'FOB' is regularly found in commercial contracts, particularly those involving the sale of goods. Modern applications include defining who is liable for shipping costs and who bears the risk of loss or damage during transit, which can significantly affect negotiations and contracts.

• A seller agrees to ship goods 'FOB destination,' meaning the seller assumes risk and expenses until the goods arrive at the buyer's specified location.
• In a contract specifying 'FOB shipping point,' the buyer assumes responsibility once the goods are loaded onto the transport vessel.