FOB Full Form | Full Form of FOB | What is the Full Form of FOB




FOB Full Form - Free on Board

Free on Board

Free on Board

  • FOB stands for free on Board. It's a term related to shipping of products from one place to a different.
  • It indicates that the price quoted by the seller includes the fees of transferring goods from the production unit to a ship at a port as mentioned by the customer.
  • FOB is used in non-containerized sea freight.

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Type of FOB Contract

  • FOB Destination
  • FOB Origin
 FOB Types

FOB Types

FOB Destination

  • It is the standard and commonly used FOB contract.
  • It indicates that the seller is that the owner of products until the products are placed on the ship as mentioned by the customer and therefore the seller is responsible for damage or loss during transport.
  • Once the products reach the destination the customer becomes the owner of products and thereafter the customer is responsible for any loss or damage.

FOB Origin

  • When there's no FOB term or language discussed within the purchase agreement then as per the rules of Uniform Commercial Code (UCC) the purchase contract are going to be treated as a FOB Origin contract.
  • It makes the customer the owner of the products at the time and place the products originate within the production unit.
  • During this contract, the customer is responsible for the loss or damage during transport not the seller.

How it Works

  • Suppose you a dry-fruits dealer 'ABC' and you ordered 1000 jars of almonds from a corporation 'XYZ' established at Himachal Pradesh in India. You sell the dry fruits at your store in New Delhi.
  • If your purchase agreement includes "FOB Destination" New Delhi , ABC warehouse" this suggests the corporate 'XYZ' can pay the transportation charges to ship the 1000 jars of almonds from its unit in Himachal Pradesh to your warehouse in New Delhi.
  • The jars will become your property after arriving at your warehouse; it means if the jars are lost, damaged or stolen during transportation, the corporate XYZ is liable because it still owns the products until goods reach the destination.
  • Likewise, if the products are damaged or lost after arriving at your warehouse, you'll be legally responsible for the loss.


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