Posted by Norcal Dave on Wednesday, September 19, 2007 at 12:59:40 :
In Reply to: O/T shipping question posted by mclark on Wednesday, September 19, 2007 at 09:19:31 :
Free on Board and you must designate the location. Its a legal term that designates the point at which the title changes hands.
For instance, FOB Factory-Freight allowed means that although the seller has included delivery in their price, you the buyer actually take title to the property the moment it exits the factory and assume the risk for transport. The transporter would usually be insured, and you the buyer can demand that, but if its damaged you are the one that has to handle the freight claim then repurchase new materials from the factory.
If its FOB jobsite, then the seller assumes all risk until you take possesion at the jobsite. Its an important nuance because in most cases you dont want to deal with recovering monies associated with the frieght claim, you just want the material and you want it right now.
Most people who use the term actually have no idea what it really means legally, but it can get you in a world of hurt on dollars and time if you dont understand it. Construction projects dont care why its not there, only that its not there and what are you going to do or pay to get it there tomorrow to not blow the schedule.