Under the F.O.B. delivery term, who bears the risk of loss until the goods reach the destination?

Under the F.O.B. (Free on Board) delivery term, the seller bears the risk of loss until the goods reach the designated destination. In an F.O.B. arrangement, the seller is responsible for all expenses and risks associated with transporting the goods up to the point where they are delivered at a specified location. This means that should any damage or loss occur during transit, it is the seller who is accountable until the goods have been delivered to the buyer's specified location.

Once the goods reach the destination, the risk then transfers to the buyer, who assumes responsibility for the goods. This term is used to clarify the responsibilities of the buyer and seller concerning shipping costs and the risk of loss, ensuring that both parties are aware of when the ownership and responsibility shift.

This understanding is critical in commercial transactions, as it influences decisions about shipping, insurance coverage, and the timing of when liability changes from one party to another.