Free On Board

Free On Board or FOB abbreviation is an import / export term relating to the point at which responsibility for goods passes from seller (exporter) to buyer (importer). It's in this listing because it's commonly misunderstood and also has potentially significant financial implications. FOB meant originally (and depending on the context stills generally means) that the seller is liable for the goods and is responsible for all costs of transport, insurance, etc., until and including the goods being loaded at the nominated port. Logically FOB also meant and still means that the seller is liable for any loss or damage up to the point that the goods are loaded onto the vessel at the FOB port.

Updated On: 09.10.04