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Information International rules and organization Incoterms 2000 [iNKOTERMS 2000] The 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 delivers when the goods pass the ship's rail at the named port of shipment. This means that from now on all the costs and risks of loss or damage to the goods must be borne by the buyer. The FOB term requires the seller to clear the goods for export. This term can be used only for sea or inland waterway. If the parties do not intend to deliver the goods across the ship's rail, the term should be used FCA.

THE SELLER

OBLIGATIONS OF THE BUYER

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

B.1. Payment of the price

The seller must, in accordance with the contract of sale provide the goods and the commercial invoice, or its equivalent electronic message, and any other evidence of conformity which may be required by the contract of sale.

The buyer must pay provided in the contract of purchase and sale price of the goods.

A.2. Licences, authorizations and formalities

B.2. Licences, authorizations and formalities

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

The buyer shall at his own expense and risk any import license or other official authorization and carry out, where applicable, all customs formalities for the import of the goods and, if necessary, for their transit through any country.

A.3. Contracts of carriage and insurance

B.3. Contracts of carriage and insurance

a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.

a) Contract of carriage
Buyer shall at his own expense for the carriage of the goods from the named port of shipment.
b) Contract of insurance
No obligation.

A.4. SUPPLY

B.4. Taking delivery

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

The buyer must take delivery of the goods when they have been delivered in accordance with Article A.4.

A.5. Transfer of risks

B.5. Transfer of risks

The seller must, subject to the provisions of Article B.5. bear all risks of loss 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 or damage to the goods - from the moment of transfer of the goods through the ship's rail at the named port of shipment, and - from the agreed date or from the expiration of the agreed period for delivery, which arise or in default of the obligation to give notice in accordance with Article B. 7., Or if the vessel designated by him failed to arrive on time, or was unable to accept the goods on time or ceased taking delivery of cargo prior to the time set in accordance with Article B.7. Time. The condition, however, is the proper conformity of the goods to the contract. This means that the goods must be properly identified, that is, definitely detached or otherwise identified as the commodity that is the subject of this contract.

A.6. Division of costs

B.6. Division of costs

The seller must, subject to the provisions of Article B.6 .: - pay all costs relating to the goods until the goods pass the ship's rail at the port of shipment designated in accordance with Article A.4. and - where applicable, all costs of customs formalities necessary for export as well as all duties, taxes and other charges payable upon export.

The buyer is obliged to bear all the costs associated with the goods from the moment of transfer of the goods through the ship's rail in the named port of shipment and bear all additional costs incurred either because the vessel indicated by him could not arrive in time or was not able to accept the goods On time, or terminated acceptance of the goods until the time established in accordance with Article B.7. Date, or due to his failure to give a proper notice in accordance with Article B.7. The condition, however, is the proper conformity of the goods to the contract. This means that the goods must be properly identified, that is, definitely detached or otherwise identified as the goods that are the subject of this contract, and - pay, if required, all duties, taxes and other charges, as well as the costs of customs formalities , Payable upon import of the goods, and, if necessary, for its transit transportation through third countries.

A.7. Notice to the buyer

B.7. Notice to the seller

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

The buyer must give the seller sufficient notice of the vessel name, loading point and required delivery time.

A.8. Proof of delivery, transport document or equivalent electronic message

B.8. Proof of delivery, transport document or equivalent electronic message

The seller must provide the buyer, at his own expense, with the usual proof of delivery of the goods, the usual transport documents in accordance with Article 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, all possible assistance in obtaining a transport document for the conclusion of the contract of carriage (for example, negotiable bill of lading, non-negotiable sea waybill, Proof of carriage by inland waterway, or a multimodal consignment note). In the event that the seller and the buyer agree on the use of electronic communications, the above documents may be replaced by equivalent electronic messages (EDI).

The buyer must accept the proof of delivery in accordance with Article A.8.

A.9. Checking - packaging - marking

B.9. Inspection of goods

The seller must bear the costs associated with the inspection of the goods (for example, checking the quality, size, weight, quantity) required for the delivery of the goods in accordance with A.4. The seller must at his own expense pay the costs associated with the packaging necessary to transport the goods (except in cases where it is customary in the industry to ship the goods stipulated by the contract without packaging). The latter is carried out to the extent that circumstances related to transportation (for example, modes of transport, destination) were known to the seller prior to the conclusion of the contract of sale. The packaging must be properly marked.

The buyer must pay the costs of any pre-shipment inspection except when such inspection is mandated by the authorities of the country of export.

A.10. OTHER OBLIGATIONS

B.10. OTHER OBLIGATIONS

The seller must provide the buyer at the request of the latter's expense, risk and every assistance in obtaining any documents or equivalent electronic messages (other than those mentioned in the article A.8.) Issued or transmitted in the country of dispatch and / or country of origin, which the buyer may require for the import of the goods and, if necessary, for their transit through any country. The seller must provide the buyer, at his request with the necessary information for procuring insurance.

The buyer must pay all costs and charges incurred in obtaining the documents or equivalent electronic messages, as provided in Article A.10., And reimburse the seller incurred by the buyer in rendering his assistance.

 

In some cases the preamble recommends the use or not use a particular term. This is particularly important with regard to the choice between FCA and FOB.

Regrettably, merchants continue to use FOB when it is totally out of place, in this case, causing the seller to incur risks subsequent to the transfer of goods to the carrier named by the buyer. FOB is used only where the goods are intended for delivery "through the ship's rail" or, in extreme cases, to the ship, and not when the goods are handed over to the carrier for subsequent entry into the ship, for example stowed in containers or loaded on lorries or cars in the so-called "ro-ro" transport.

Thus, in the preamble of FOB strong warning has been made that the term should not be used when the parties do not intend to deliver the goods across the ship's rail.

It happens that the parties by mistake use terms intended for carriage of goods by sea also when another mode of transport. This may put the seller in a position where he can not fulfill his obligation to submit a relevant document to the buyer (for example, bill of lading, sea waybill or the electronic equivalent).