What does FOB origin signify?

FOB origin, which stands for "Free On Board" at the point of shipment, indicates that the buyer takes ownership of the goods as soon as they leave the seller's premises. This means that the responsibility for the goods transfers from the seller to the buyer at the point of shipping. As a result, while the seller is still responsible for loading the items onto the shipping vehicle, the buyer assumes all risks and costs related to the shipment once the goods are on the way.

In this context, it is accurate to state that items are not delivered to the purchaser in the sense that the risk, responsibility, and title transfer to the purchaser at the moment the goods are shipped from the seller's location. Therefore, the proper understanding of FOB origin is essential for determining who is responsible for shipping costs, insurance, and any potential loss or damage during transit. This clarity in responsibility and ownership is vital for both parties involved in a commercial contract.