Freight on Board
The determination on who will pay for the freight costs and where ownership transfers from seller to buyer.
- Also Known As
- Free on Board
Freight on Board (FOB) in an international commercial law term that indicates the point at which the costs and risk of shipped good shifts from seller to the buyer. The terms will be phased as FOB [location], Freight [payment]
FOB location is specified as either Origin or Destination.
- Origin: Buyer of goods assumes the responsibility at the point of origin.
- Destination: Buyer of goods assumes the responsibility at the point of destination.
Freight payment is specified as either Prepaid or Collect.
- Prepaid: Seller pays the cost of shipping.
- Collect: Buyer pays for the freight and shipping costs.