Incoterms® 2010 Rules—FOB Free on board

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Incoterms® 2010 Rules—FOB Free on board
  • Guidance note
  • The seller’s and buyer’s obligations

Incoterms® 2010 Rules—FOB Free on board

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Incoterms® 2010 rules were replaced by Incoterms® 2020 rules with effect from 1 January 2020. For the FOB Incoterm applicable from 1 January 2020, see Practice Note: Incoterms® 2020 Rules—FOB Free on board.

FOB (insert named port of shipment) Incoterms® 2010

Guidance note

This rule is to be used only for sea 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 either to deliver the goods on board the vessel or to procure goods already so delivered for shipment. The reference to ‘procure’ here caters for multiple sales down a chain (‘string sales’), particularly common in the commodity trades.

FOB may not be appropriate where goods are handed over to the carrier before they are on board the

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