"Free on Board" means that the seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.
The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport. When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the FCA term is more appropriate to use.
A. THE SELLER MUST
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export licence or other official authorisation and carry out all customs formalities necessary for the exportation of the goods.
A.3. Contract of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.
A.4. Delivery
Deliver the goods on board the vessel named by the buyer at the named port of shipment on the date or within the period stipulated and in the manner customary at the port.
A.5. Transfer of risks
Subject to the provisions of B.5., bear all risks of loss of or damage to the goods until such time as they have passed the ship's rail at the named port of shipment.
A.6. Division of costs
Subject to the provisions of B.6.
- pay all costs relating to the goods until such time as they have passed the ship's rail at the named port of shipment;
- pay the costs of customs formalities necessary for exportation as well as all duties, taxes and other official charges payable upon exportation.
A.7. Notice to the buyer
Give the buyer sufficient notice that the goods have been delivered on board.
A.8. Proof of delivery, transport document or equivalent
electronic message
Provide the buyer at the seller's expense with the usual document in proof of delivery in accordance with A.4.
Unless the document referred to in the preceding paragraph is the transport document, render the buyer, at the latter's request, risk and expense, every assistance in obtaining a transport document for the contract of carriage (for example, a negotiable bill of lading, a non-negotiable sea waybill, an inland waterway document, or a multimodal transport document).
Where the seller and the buyer have agreed to communicate electronically, the document referred to in the preceding paragraph may be replaced by an equivalent electronic data interchange (EDI) message.
A.9. Checking - packaging - marking
Pay the costs of those checking operations (such as checking quality, measuring, weighing, counting) which are necessary for the purpose of delivering the goods in accordance with A.4.