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FOB Shipping Point question
Posted on 3/12/14 at 2:07 pm
Posted on 3/12/14 at 2:07 pm
I have the following hypothetical just asked of me by a customer:
Company A sells a widget to Customer B and Freight Company C takes possession of the widget sold by Company A to Customer B, at the loading dock.
The item was sold under the shipping terms: F.O.B. Shipping Point or F.O.B. Origin.
Freight Company C's truck leaves the dock, but before the truck can leave the premises of Company A, the truck catches fire, destroying the widget being shipped to Customer B.
Since transfer of title occurs when the widget leaves Company A, has the title to the widget officially transferred to Purchaser B, or does the title remain with Company A until the truck departs Company A's premises? Since the truck never left Company A's premises before the widget was destroyed, who is responsible to file a claim; Company A or Customer B?
Company A sells a widget to Customer B and Freight Company C takes possession of the widget sold by Company A to Customer B, at the loading dock.
The item was sold under the shipping terms: F.O.B. Shipping Point or F.O.B. Origin.
Freight Company C's truck leaves the dock, but before the truck can leave the premises of Company A, the truck catches fire, destroying the widget being shipped to Customer B.
Since transfer of title occurs when the widget leaves Company A, has the title to the widget officially transferred to Purchaser B, or does the title remain with Company A until the truck departs Company A's premises? Since the truck never left Company A's premises before the widget was destroyed, who is responsible to file a claim; Company A or Customer B?
4
Posted on 3/12/14 at 2:13 pm to HubbaBubba
My company enters into only FOB Shipping agreements and records the revenue when the goods are loaded. Not sure how that plays into your scenario, but I always assumed it was no longer our responsibility once it was loaded.
Posted on 3/12/14 at 2:13 pm to HubbaBubba
The driver would have signed paperwork accepting the goods, so Company B has the liability, in my non-expert opinion.
Posted on 3/12/14 at 2:52 pm to HubbaBubba
Customer B has title to the goods but has recourse against Company C for the loss of property.
Posted on 3/12/14 at 3:17 pm to HubbaBubba
I think FOB and Exworks is getting confused here.
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