Free on Board Law and Legal Definition

The term Free on Board relates to shipping of goods. Free on Board allocates the rights and duties of the buyer and seller of goods with regard to delivery, payment, and risk of loss. According to this, the seller must clear the goods for export, and the buyer must arrange for transportation. Only when the goods pass the transporter's rail, the seller's delivery is complete. The responsibility for all costs of carriage is on the buyer. With the Free on Board clause in the contract, goods are to be delivered on board by the seller free of charges, and the buyer is not at risk until goods are delivered on board.