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LSDefine
Simple English definitions for legal terms
FOB
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A quick definition of FOB:
FOB: This is a term used in shipping. It means that the seller is responsible for getting the goods to a certain point, usually a port or airport. Once the goods are at that point, the buyer takes over and is responsible for getting them to their final destination. It's like a relay race, where one person passes the baton to the next person.
A more thorough explanation:
Definition: FOB stands for Free on Board. It is a shipping term that indicates who is responsible for the goods during transportation and when the ownership of the goods is transferred from the seller to the buyer.
For example, if a seller agrees to sell a product to a buyer FOB shipping point, it means that the buyer is responsible for the goods once they leave the seller's warehouse. The buyer will also be responsible for any damages or losses that occur during transportation. On the other hand, if the seller agrees to sell the product FOB destination, it means that the seller is responsible for the goods until they reach the buyer's warehouse.
Another example is when a company orders a large quantity of goods from a supplier overseas. The supplier may offer FOB shipping terms, which means that the supplier will be responsible for the goods until they are loaded onto the ship. Once the goods are on the ship, the buyer will be responsible for any damages or losses that occur during transportation.
These examples illustrate how FOB terms can impact the responsibility and ownership of goods during transportation. It is important for buyers and sellers to understand these terms to avoid any misunderstandings or disputes.