Information International rules and organizations Incoterms 2000 [iNKOTERMS 2000] Term F FOB - FOB

FOB(Free On Board (... named port of shipment))
Free on board (... named port of shipment)

The term "free on board" means that the seller has delivered when the goods have passed the ship's rail at the named port of shipment. This means that from now on, all costs and risks of loss or damage to the goods must be borne by the buyer. Under the FOB term, the seller is responsible for clearing the goods for export. This term can only be used when goods are transported by sea or inland waterways. If the parties do not intend to deliver the goods across the ship's rail, the termFCA.

RESPONSIBILITIES OF THE SELLER

BUYER'S RESPONSIBILITIES

A.1. DELIVERY OF THE GOODS IN ACCORDANCE WITH THE CONTRACT

B.1. PAYMENT OF THE PRICE

The seller is obliged, in accordance with the sales contract, to provide the buyer with the goods, a commercial invoice or equivalent electronic message, as well as any other evidence of conformity that may be required under the terms of the sales contract.

The buyer is obliged to pay the price of the goods stipulated by the contract of sale.

A.2. LICENSES, CERTIFICATES AND FORMALITIES

B.2. LICENSES, CERTIFICATES AND FORMALITIES

The seller must obtain at his own risk and expense any export license or other official authorization and carry out, where applicable, all customs formalities necessary for the export of the goods.

The buyer must obtain at his own expense and risk any import license or other official authorization and carry out, if necessary, all customs formalities necessary for the importation of the goods and, if necessary, for their transit through third countries.

A.3. CONTRACTS OF CARRIAGE AND INSURANCE

B.3. CONTRACTS OF CARRIAGE AND INSURANCE

a) Contract of carriage
No commitment.
b) Insurance contract
No commitment.

a) Contract of carriage
The buyer must, at his own expense, contract for the carriage of the goods from the named port of shipment.
b) Insurance contract
No commitment.

A.4. SUPPLY

B.4. ACCEPTANCE OF DELIVERY

The seller must load the goods on board a vessel named by the buyer on the date agreed or within the time agreed at the named port of shipment in accordance with the customs of the port.

The buyer is obliged to take delivery of the goods when it has been made in accordance with Article A.4.

A.5. RISK TRANSFER

B.5. RISK TRANSFER

The seller is obliged, subject to the provisions of Article B.5. bear all risks of loss of or damage to the goods until the goods pass the ship's rail at the named port of shipment.

The buyer must bear all risks of loss of or damage to the goods - from the moment the goods pass the ship's rail at the named port of shipment, and - from the agreed date or from the expiration of the agreed time for delivery, which arise or fail to comply with his obligation to give notice in accordance with article B. 7., or in the event that the ship appointed by him could not arrive on time, or was not able to accept the goods on time or stopped accepting the cargo before the time established in accordance with Article B.7. time. The condition, however, is the proper conformity of the goods with the contract. This means that the goods must be properly identified, i.e. definitely isolated or otherwise identified as the goods that are the subject of this contract.

A.6. COST ALLOCATION

B.6. COST ALLOCATION

The seller must, subject to the provisions of article B.6.: - bear all costs associated with the goods until the goods pass the ship's rail at the named port of shipment in accordance with article A.4. and - pay, if required, all costs associated with the execution of customs formalities for export, as well as other duties, taxes and other charges payable upon export of the goods.

The buyer must - bear all costs in connection with the goods from the moment the goods pass the ship's rail at the named port of shipment and - bear all additional costs arising either from the fact that the ship specified by him failed to arrive on time or was not able to receive the goods on time, or stopped accepting the cargo before the time established in accordance with Article B.7. date, or as a result of his failure to comply with the obligation to give proper notice in accordance with Article B.7. The condition, however, is the proper conformity of the goods with the contract. This means that the goods must be properly identified, i.e., definitely separated or otherwise identified as the goods that are the subject of this contract, and - pay, if necessary, all duties, taxes and other fees, as well as the costs of customs formalities payable upon import of the goods and, if necessary, for their transit through third countries.

A.7. NOTICE TO THE BUYER

B.7. NOTICE TO SELLER

The seller must give the buyer sufficient notice that the goods have been delivered in accordance with A.4.

The buyer must notify the seller sufficiently of the name of the vessel, the place of loading and the time of shipment.

A.8. PROOF OF DELIVERY, SHIPPING DOCUMENTS OR ELECTRONIC EQUIVALENTS

B.8. PROOF OF DELIVERY, SHIPPING DOCUMENTS OR ELECTRONIC EQUIVALENTS

The seller must provide the buyer, at his own expense, as proof of delivery of the goods, with the usual transport documents in accordance with A.4. In the event that such evidence referred to above is not a transport document, the seller must provide the buyer, at his request, at his expense and risk, with all possible assistance in obtaining a transport document for concluding a contract of carriage (for example, a negotiable bill of lading, a non-negotiable sea waybill, proof of carriage by inland waterways, or a multimodal transport waybill). In the event that the seller and the buyer have agreed on the use of electronic communication means, the documents mentioned above may be replaced by equivalent electronic messages (EDI).

The buyer is obliged to accept proof of delivery in accordance with article A.8.

A.9. CHECK - PACKAGING - MARKING

B.9. GOODS INSPECTION

The seller must bear the costs associated with the verification of the goods (for example, checking the quality, dimensions, weight, quantity) necessary for the delivery of the goods in accordance with Article A.4. The seller is obliged to pay at his own expense the costs associated with the packaging necessary for the transport of the goods (except in cases where it is customary in this branch of trade to send the goods stipulated by the contract without packaging). The latter is carried out to the extent that the circumstances relating to the transport (eg means of transport, destination) were known to the seller before the conclusion of the contract of sale. The packaging must be properly labelled.

The buyer must bear the costs associated with any pre-shipment inspection of the goods, unless such inspection is required by the authorities of the country of export.

A.10. OTHER LIABILITIES

B.10. OTHER LIABILITIES

The seller is obliged, at the request of the buyer, to provide the latter, at his expense and risk, with full cooperation in obtaining any documents or equivalent electronic messages (other than those mentioned in article A.8.) issued or used in the country of dispatch and / or in the country of origin of the goods, which may be required by the buyer for the importation of the goods or, if necessary, for their transit through third countries. The seller is obliged to provide the buyer, at his request, with all the information necessary for the implementation of insurance.

The buyer must bear all costs and fees associated with the receipt of documents or equivalent electronic messages, as provided in Article A.10., and also reimburse the seller's expenses incurred by the latter as a result of his assistance to the buyer.

 

In some cases, the introduction recommends the use or not use of a particular term. This is especially important in relation to the choice between the terms FCA and FOB.

Unfortunately, traders continue to use the term FOB where it is completely inappropriate, while forcing the seller to bear the risks of transferring the goods to the carrier named by the buyer. FOB can only be used where the goods are intended to be delivered "across the ship's rail" or, as a last resort, to the ship, and not when the goods are handed over to the carrier for subsequent loading on the ship, for example, loaded in containers or loaded on trucks or in wagons in the so-called "ro-ro" transport.

Thus, a strong warning was made in the introduction to the term FOB that the term should not be used when the parties do not intend to deliver the goods over the ship's rail.

It happens that the parties erroneously use terms that are also intended for the transport of goods by sea when another mode of transport is intended. This may put the seller in a position where he cannot fulfill his obligation to provide the buyer with an appropriate document (eg bill of lading, sea waybill or electronic equivalent).

 
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