free on board
Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.
Related to free on board: bill of lading, Incoterms, Cost and Freight
Free on board (FOB)
Implies that distribution services like transport and handling performed on goods up to the customs frontier (of the economy from which the goods are classed as merchandise) are included in the price.
Free On Board
In maritime international commerce, an agreement between a seller and a buyer indicating that the seller has fulfilled his/her obligation to deliver a good when he/she has transferred it to the ship on which it will be transported. All cost and risk transfers to the buyer when the good crosses the ship's rail. The buyer designates the ship onto which the seller must deliver the good. See also: United Nations Convention on Contracts for the International Sale of Goods, Incoterm.
free on board (FOB)
Used in commodities contracts to indicate the geographical point to which delivery is included in the price. After this point, the buyer is responsible for all risks and delivery costs. The FOB point is only important to someone who sells or buys a futures contract with the intention of making or taking delivery of the specific commodity.