Free On Board (FOB) Legal Meaning and Definition

Here is a simplified definition of the legal term Free On Board (FOB).

Free On Board (FOB) (noun)

Free On Board, commonly abbreviated as "FOB," is a legal term in commercial law referring to a type of agreement about transportation costs between a buyer and a seller. Under a FOB agreement, the seller is responsible for the goods and all costs related to them until they are loaded onto a transportation vehicle (like a ship, plane, or truck). At this point, the responsibility, including cost and risk, transfers to the buyer. The buyer is then responsible for any additional costs like shipping, insurance, and handling charges that might occur after the goods are on board.