This rule applies only to maritime or inland waterway transport. "Free on Board" means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards. The seller is required to deliver the goods on board the vessel or to procure goods that have been already so delivered for shipment. The reference to "procuring" here caters for multiple sales down a chain, which is common in commodity trades. FOB is not suitable where the goods are handed over to the carrier before they are on board the vessel, for example, goods in containers, which are typically delivered at a terminal. In such situations, the FCA rule should be used. When FOB is used, the seller is responsible for clearing the goods for export. The seller has no obligation to clear the goods for import, pay import duty or carry out any import customs formalities.
| A THE SELLER'S OBLIGATIONS | B THE BUYER'S OBLIGATIONS |
| A1 Seller's general obligations The seller must provide the goods and the commercial invoice in conformity with the contract of sale and any other evidence that may be required by the contract of sale to confirm conformity of the goods. Any document referred to in clauses A1 to A10 may be an equivalent electronic record or procedure if agreed between the parties or customary. | B1 Buyer's general obligations The buyer must pay the price of the goods as provided in the contract of sale. Any document referred to in clauses B1 to B10 may be an equivalent electronic record or procedure if agreed between the parties or customary. |
| A2 Licenses, authorizations, security clearances and other formalities Where applicable, the seller must obtain, at its own risk and cost, any export license or other official authorization and carry out all customs formalities necessary for the export of the goods. | B2 Licenses, authorizations, security clearances and other formalities Where applicable, the buyer must obtain, at its own risk and cost, any import license or other official authorization or carry out all customs formalities necessary for the import of the goods and for their transit through any country. |
| A3 Contracts of carriage and insurance a) Contract of carriage The seller has no obligation to the buyer to make a contract of carriage. However, if requested by the buyer or if it is commercial practice and the buyer does not give timely instruction to the contrary, the seller may make a contract of carriage on usual terms at the buyer's risk and expense. The seller is entitled to refuse to make a contract of carriage; if the seller does make a contract of carriage, it must advise the buyer. b) Contract of insurance The seller has no obligation to the buyer to make a contract of insurance. However, if requested by the buyer, the seller must provide the buyer with necessary information needed for the buyer to procure insurance; in this case, all risks and expenses (if any) are borne by the buyer. | B3 Contracts of carriage and insurance a) Contract of carriage The buyer must contract, at its own cost, for the carriage of the goods from the named port of shipment, except where the seller had made a contract of carriage in accordance with A3 a). b) Contract of insurance The buyer has no obligation to the seller to make a contract of insurance. |
| A4 Delivery The seller must deliver the goods either by placing them on board the vessel nominated by the buyer at the loading point, if any, indicated by the buyer at the named port of shipment or by procuring the goods so delivered. In either case, the seller must deliver the goods on the agreed date or within the agreed period and in the manner customary at the port. If no specific loading point has been indicated by the buyer, the seller may select the point within the named port of shipment that best suits its purpose. | B4 Taking delivery (Taking delivery) The buyer must take delivery of the goods when they are delivered in accordance with A4. |
| A5 Transfer of risks The seller bears all risks of loss of or damage to the goods until they have been delivered in accordance with A4, with the exception of loss or damage caused by circumstances described in B5. | B5 Transfer of risks The buyer bears all risks of loss of or damage to the goods from the time they have been delivered in accordance with A4. If: a) the buyer fails to give notice in accordance with B7 regarding the nomination of the vessel; or b) the vessel nominated by the buyer fails to arrive on time to enable the seller to comply with A4, or is unable to take the goods, or stops loading earlier than the time notified in accordance with B7; then the buyer bears all risks of loss of or damage to the goods from: 1) the agreed date, or in the absence of an agreed date, 2) from the date of the seller's notice within the agreed period in accordance with A7, or if no such notice date has been agreed, 3) from the expiry date of any agreed period for delivery, provided that the goods have been clearly identified as the contract goods. |
| A6 Division of costs The seller must pay: a) all costs relating to the goods until they have been delivered in accordance with A4, other than those payable by the buyer as provided for in B6; and b) where applicable, the costs of customs formalities necessary for export, as well as all duties, taxes and other charges payable upon export. | B6 Division of costs The buyer must pay: a) all costs relating to the goods from the time they have been delivered in accordance with A4, except costs of customs formalities necessary for export, duties, taxes and other charges payable upon export as referred to in A6 b); and b) any additional costs incurred either because: (i) the buyer has failed to give appropriate notice in accordance with B7, or (ii) the vessel nominated by the buyer fails to arrive on time, or is unable to take the goods, or stops loading earlier than the time notified in accordance with B7, provided the goods have been clearly appropriated to the contract; and where applicable, all duties, taxes and other charges payable upon import of the goods, and the costs of customs formalities for import, as well as costs for the transit of the goods through any country. |
| A7 Notice to the buyer The seller must, at the buyer's risk and cost, give the buyer sufficient notice that the goods have been delivered in accordance with A4 or that the vessel has failed to take the goods within the agreed time. | B7 Notice to the seller The buyer must give the seller sufficient notice regarding the vessel's name, loading point and, when necessary, the selected delivery time within the agreed period. |
| A8 Delivery document The seller must, at its own cost, provide the buyer with the usual document proving delivery of the goods in accordance with A4. Unless such document is the transport document, the seller must, if requested, assist the buyer at the buyer's risk and cost in obtaining a transport document. | B8 Proof of delivery The buyer must accept the delivery document provided in accordance with A8. |
| A9 Inspection, packaging, marking The seller must pay the costs of any checking operations (such as checking quality, measuring, weighing, counting) that are necessary for the purpose of delivering the goods in accordance with A4, as well as any pre-shipment inspection mandated by the authorities of the exporting country. The seller must, at its own cost, package the goods, unless it is customary for the particular trade to transport the type of goods sold unpackaged. The seller must package the goods in a manner suitable for their transport, unless the buyer has notified the seller of specific packaging requirements before the contract of sale is concluded. The packaging must be marked appropriately. | B9 Inspection of goods The buyer must pay the costs of any pre-shipment inspection, except inspection mandated by the authorities of the exporting country. |
| A10 Assistance with information and related costs Where applicable, upon request by the buyer at the buyer's risk and cost, the seller must provide the buyer, in a timely manner, with all assistance in obtaining any documents and information (including security-related information) necessary for the import of the goods and/or their transport to the final destination. The seller must reimburse the buyer all costs incurred in providing or assisting the seller in obtaining documents and information as stipulated in B10. | B10 Assistance with information and related costs The buyer must advise the seller in a timely manner of any security information requirements so that the seller can comply with A10. The buyer must reimburse all costs and expenses incurred by the seller in providing assistance to the buyer in obtaining documents and information as referred to in A10. Where applicable, upon request by the seller at the seller's risk and cost, the buyer must assist the seller in obtaining any documents and information necessary for the transport, export and transit of the goods (including security-related information). |
SpecfL Logistics (BOFENG LOGISTICS) specializes in one-stop logistics services including domestic container sea freight, international sea freight (FCL/LCL), Hong Kong/Macau logistics dedicated lines, as well as trailer, customs declaration, and warehousing. Contact: 130-7567-8958 (Manager Huang). Call now for a tailored quote!
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