'Free on board (F.O.B.) contract - the seller pays for transportation of the goods to the port of shipment , plus loading costs . The buyer pays freight , insurance . unloading costs and transportation from the port of destination to his factory . The passing of risks occurs when the goods pass the ship's rail at the port of shipment . Internationally the term specifies the port of origin , e.g. "FOB New York " . if the buyer fails to nominate a ship within the specified delivery time , he is in breach of the contract which will make him liable for damages caused by his non-performance ( failure to accept the goods ).
'Cost , insurance , freight' (C.l.F.) contract - contract of sale of goods includes the cost of the goods together with insurance during transit and the freight for delivery to the port of destination . When a price is quoted CIF , it means that the selling price includes the cost of the goods , the freight or transport costs and also the cost of marine insurance .
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