Fob Destination Agreement
September 20, 2021 | Leave a comment
So, what responsibilities would a seller have today when it comes to shipping agreements if the sale duration is F.. B-O. Origin? If the seller and the buyer have concluded an agreement by which the buyer has agreed to make the commitment to make arrangements for transport, to call “customer recovery (CPU)” or “freight arranged by the customer”, the seller is released from any liability, with the exception of the obligation to pack the goods correctly to withstand the difficulties of the planned transport. In this example, we can assume that the model company True Fit Fitness is based in the United States and sells bulk devices to a fitness equipment supplier in Europe. The seller may impose a FOB determination agreement stipulating that the selling price of the equipment worth USD 2,300 is due upon arrival of the product at the buyer`s destination. In addition, we could assume that the products never arrived at Europe. Even if the buyer remains contractual with the seller, the seller can assume full responsibility for the lost goods, since a FOB disposition contract has been signed. In the case of CIF contracts, the costs of transporting the goods from the seller to the buyer are borne by the seller. The seller pays insurance, transport costs and other costs related to the transport of goods until the buyer takes possession of the goods. Ownership passes when the goods arrive at their destination: the seller retains ownership and control until it is delivered to the buyer and accepted by the buyer On the other hand, the FOB (free on board) destination point relates to the sale of goods that would take place as soon as a product reaches a buyer`s destination. This situation is different from the FOB shipping unit in that the seller may be responsible for shipping costs and any obligations regarding the product as long as these products remain in transit.
Import duties, when they reach the border of one country to enter the other country under the conditions of the FOB destination, are due in the customs port of the country of destination.  Suppose ABC company in the U.S. purchases electronic devices from its supplier in China and the company signs a FOB delivery agreement. If the designated carrier damages the package during delivery, ABC Company assumes full responsibility for this and cannot ask the supplier to reimburse the company for any loss or damage suffered. The supplier is only responsible for the transmission of the electronic devices to the carrier. 2. Deliveries must be delivered at the contractor`s expense to the consignee`s shipyard (where the place of destination is a port city and the deliveries are for export), the storage unloading platform or the receiving dock. The Government is not responsible for deliveries, storage, stand fees, incidental costs or other costs incurred prior to the actual delivery (or “constructive placement” within the meaning of carriers` tariffs) of deliveries to the place of destination, unless such charges are caused by an act or injunction of the Government acting in its contractual capacity. . . .