Duties of the buyer[1]
The buyer must pay the price as determined in the contract of sale, incur at his own risk and expense all import licences, authorisations, formalities, contracts of carriage and insurance. The buyer must take delivery when delivered at port and in the manner customary at the port on board the nominated vessel. He will also bear all risk once goods have passed over the ship's rail. The buyer on the other hand pays costs from time goods have passed over rail. He is also obliged to give adequate notice of the vehicle he has selected and has to pay for costs arising from lateness of such vehicle.
In Pyrene & Co v Scindia Navigation CO[2], Mr Justice Devlin carefully laid out three types[3] of f.o.b. contract. First, in the classic case, the buyer nominates the ship and the seller puts the goods on board for account of the buyer, procuring a bill of lading. The seller is then a party to the contract of carriage and if he has taken the bill of lading to his order, the only contract of carriage to which the buyer can become a party is that contained in or evidence by the bill of lading which is endorsed to him by the seller. The second is a variant of the first. In this instance the seller arranges for the ship to come on the berth, but the legal incidents are the same. In the third case the seller puts the goods on board the ship takes a mate's receipt and gives this to the buyer or his agent who would then procure a bill of lading.
This classification was approved and clearly summarised in the subsequent case of The El Amria and The El Minia.[4]
[2] [1954] 1 Lloyd’s Rep 321; 2 QB 402; 2 All ER 158; accessed on 27th October 2010
[3]<https://login.westlaw.co.uk/maf/wluk/app/document?&src=rl&srguid=ia744d0650000012beec2fb80f5bb0a38&docguid=IE473C2F0533811DFA4079190C164A3BC&hitguid=IE473C2F0533811DFA4079190C164A3BC&spos=2&epos=2&td=280&crumb-action=append&context=3 2010> accessed on 27th October 2010
[4] [ 1982] 2 Lloyd’s Rep 28; accessed on 27th October 2010
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