F.O.B DESTINATION QUESTIONS – REG

  • Creator
    Topic
  • #201601
    shmogma
    Participant

    I can’t get a handle on these questions…would any have any sort of clever way of knowing what to do when encountering when risk of loss passes relating to these questions

    FAR - 80
    REG - PENDING
    AUD- PENDING
    BUS - PENDING

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  • Author
    Replies
  • #774003
    Stilgoin
    Participant

    FOB Shipping Point- the title passes to the buyer at the shipping point, so risk of loss passes to buyer at shipping point. FOB Destination- the title passes to the buyer at the destination, so the risk of loss passes to the buyer at the destination.

    Or a different way- the sale occurs at FOB shipping point and the sale occurs at FOB destination.

    Hope that helps. 😉

    B | 62, 78
    A | 73, 67, 79
    R | 82
    F | 59, 59, Waiting

    Ethics | 93

    "Success is not final, failure is not fatal: it is the courage to continue that counts."
    ~Winston Churchill

    “In a world full of critics, be an encourager."

    #774004
    Spartans92
    Participant

    Think the easiest and most logical way is to think of FOB shipping as buying things online like Amazon. Who bears the shipping cost and when do you receive the “rights.” Compared to FOB destination you could think about receiving monthly supplies.. Those supplies aren't yours until it gets to your house. This always works for me.

    BEC- PASS

    #774005
    Anonymous
    Inactive

    The absolute easiest way I have found to remember this is to invert this. What is the easiest part to remember? FOB-destination. Simple right, it is in the name? the buyer doesn't take those goods until the goods reaches the destination, so the shipper is responsible for the goods. Fob-Delivery, which is rarely used in the real world by the way, is the customer is responsible for the goods. Someone said Amazon was a good way to remember, but I think to more elucidate this think of a train full of goods from IOWA to SAN FRANCISCO. If the contract is written FOB-Destination, then the buyer isn't liable for the goods until they actually reach SAN FRANCISCO. If the contract is written fob- DELIVERY or SHIPPING POINT, then the buyer is saying hey, I am buying those goods in IOWA, so they are mine before they even ship. It is ALL about who wants to bare the liability for getting the goods to destination and the freight costs associated with that. Most contracts are written up FOB-Destination because traditionally the buyer doesn't bare the fuel costs or the liability for getting the goods there- they just want their goods!

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