F · 4
Force majeure
A contract clause covering events beyond the parties’ control that could not be foreseen or avoided – war, earthquake, epidemic, embargo, port closure – which temporarily or permanently prevent performance. A good clause lists the events, sets a notice period (often 7–14 days), defines the evidence required (e.g. a chamber of commerce certificate) and gives a right to terminate if the event lasts beyond a set time. Price increases or market changes are normally not force majeure.
Free Alongside Ship FAS
Used only for sea and inland-waterway transport. The seller places export-cleared goods alongside the vessel nominated by the buyer (on the quay or a barge); risk passes there, and loading onto the ship and freight are for the buyer. Common for bulk and project cargo such as grain, timber, scrap and heavy lifts; for containerised goods FCA should be used instead.
Free Carrier FCA
The seller delivers export-cleared goods to the carrier nominated by the buyer at the named place. If the place is the seller’s premises the seller loads the goods; elsewhere (e.g. a port terminal) they are delivered on the arriving vehicle ready for unloading. Suitable for any transport mode; under Incoterms 2020 the buyer can instruct its carrier to issue an on-board bill of lading to the seller, which helps with letters of credit.
Free On Board FOB
One of the most common terms in raw material trade, used only for sea and inland-waterway transport. The seller loads export-cleared goods onto the vessel nominated by the buyer at the port of shipment, and risk passes once the goods are on board. The buyer arranges freight and insurance; for bulk cargo the loading rate, laytime and demurrage must be agreed separately. For containerised goods FCA is the more accurate choice.