When does the risk transfer to the buyer in a F.O.B. transaction?

In a Free on Board (F.O.B.) transaction, the risk of loss typically transfers from the seller to the buyer at the point when the goods are delivered to a common carrier for transport. This means that once the seller hands over the items to a shipping company or a carrier, the responsibility for those goods shifts to the buyer.

This structure is important because it defines liability during the shipping phase. If any damage occurs after the goods are in the possession of the carrier, the buyer assumes the risk and responsibility for the merchandise. This principle supports the concept of liability in sales transactions, where the terms of delivery significantly influence when risk is transferred.

In contrast, signing a contract, delivering goods to the buyer, or making a payment does not affect the transfer of risk, since these actions occur before or independent of the actual change in liability associated with the physical goods during transit.