Book Opener

Figure 13.4Abbreviationf.o.b. New Yorkf.o.b. Los Angelesc.o.d.c.i.f.c.f.f.a.s.AbbreviationsMeaningFree on board to New York(This would be a shipment contract if shipped from New York.)Free on board to Los Angeles(This would be a destination contract if shipped from New York.)Collect on deliveryCost of goods shipped, insurance and freightCost of goods shipped and freightFree alongside vessel or at a dockSHIPPING TERMSIn a shipmentcontract, the sellerhas no responsibilityfor seeing that thegoods reach their destination.Who has thisresponsibility?Example 7. A business in New York ships 100 DVD players toFlorencia, a customer in Los Angeles. The shipping terms aref.o.b. New York. Title to the DVDs and risk of loss would betransferred to Florencia as soon as the DVD players are deliveredand accepted at the freight depot in New York.Destination ContractWhen a contract requires the seller to deliver the goods to a destination,it is a destination contract. Both title and risk of loss pass tothe buyer when the seller leaves the goods at the place of destination.Destination contracts are often designated by the expression f.o.b.shipping destination. Goods shipped under such terms belong to theseller until they have been delivered to the destination; also, risk ofloss remains with the seller until that point.Example 8. If Florencia, from Example 7, did not wish toaccept the responsibility of ownership during shipment of theDVDs, she could have the delivery made f.o.b. Los Angeles.The seller, under such terms, would pay the freight chargesfrom New York to Los Angeles.When no delivery is required and the contract calls for the buyer topick up the goods, title passes to the buyer when the contract is made.Example 9. Aleksei contracted to buy a camcorder from Maria.Neither party to the contract was a merchant. Aleksei gave Mariaa $50 deposit at the time of contracting and agreed to pick up thecamcorder and pay the balance in two days. Title to the camcorderpassed from Maria to Aleksei at the time of contractingbecause Maria could make delivery without moving the goods.Chapter 13: Contracts for the Sale of Goods 279