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Answer and discuss who is responsible for freight when the terms of sale are: (A) FOB...

Answer and discuss who is responsible for freight when the terms of sale are:

(A) FOB Shipping Point (B) FOB Destination Point

And what exceptions might occur to the above?

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Answer #1

A) FOB means “Freights on Board”.These terms are used regarding shipping activities of goods.

When the term of sales is FOB Shipping point the responsiblity of freight will be on the buyer.The term FOB Shipping point actually means the buyer gets the title of the ownership at the shipping point of goods.Hence the freight will be the responsiblity of the buyer.

B) Unless it is specifically mentioned in the shipping arrangement the seller will bear the cost of frieght in FOB Destination point.In an FOB Arrangement the sales is completed at the point of origin.Hence the cost of freight will be the responsiblity of the seller even though later he may pass it on the buyer.

The exeptions to both the cases occurs when it is specifically mentioned in the arrangement regarding who will be bearing the freight charges.

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