Estimating Practice Exam

A price quoted as F.O.B. generally means what regarding delivery and unloading responsibilities?

1. the contract includes unloading costs

2. the price includes delivery to the site but unloading costs are the contractor's responsibility

3. the price excludes delivery costs

4. the contractor is not responsible for any costs

The correct answer is: the price includes delivery to the site but unloading costs are the contractor's responsibility

The term F.O.B., which stands for "Free On Board," typically indicates the point at which ownership and responsibility for the goods transfer from the seller to the buyer. In the context of delivery and unloading responsibilities, a price quoted as F.O.B. means that the seller is responsible for all costs associated with delivering the goods up to a specific point, usually at the shipping dock. When the answer states that the price includes delivery to the site but unloading costs are the contractor's responsibility, it captures the essence of that transfer. Under F.O.B. terms, the seller covers the costs and responsibilities associated with the delivery to the designated location specified in the contract, but once the goods arrive, the buyer (or contractor) assumes responsibility for unloading them. This reflects a common practice in shipping and contracting, where the division of costs and responsibilities is clearly outlined.