Okla. Stat. tit. 12A § 2-319

Current through Laws 2024, c. 453.

Section 2-319 - F.O.B. and F.A.S. Terms

(1) Unless otherwise agreed the term F.O.B. (which means "free on board") at a named place, even though used only in connection with the stated price, is a delivery term under which

(a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this article (Section 2-504) and bear the expense and risk of putting them into the possession of the carrier; or

(b) when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them in the manner provided in this article (Section 2-503);

(c) when under either (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at his own expense and risk load the goods on board. If the term if F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this article on the form of bill of lading (Section 2-323).

(2) Unless otherwise agreed the term F.A.S. vessel (which means "free alongside") at a named port, even though used only in connection with the stated price, is a delivery term under which the seller must

(a) at his own expense and risk deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and

(b) obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.

(3) Unless otherwise agreed in any case falling within subsection (1) (a) or (c) or subsection (2) the buyer must seasonably give any needed instructions for making delivery, including when the term is F.A.S. or F.O.B. the loading berth of the vessel and in an appropriate case its name and sailing date. The seller may treat the failure of needed instructions as a failure of cooperation under this article (Section 2-311). He may also at his option move the goods in any reasonable manner preparatory to delivery or shipment.

(4) Under the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents.

Okla. Stat. tit. 12A, § 2-319

Laws 1961, p. 83, § 2-319.

Oklahoma Code Comment

(1) (a) Previous Oklahoma law is in accord, with certain exceptions. Selected previous Oklahoma decisions follow. First State Bank of Audubon, Iowa v. Collins-Dietz-Morris Co., 190 Okl. 409, 123 P.2d 957 (1941) (Corn to be shipped f. o. Audubon, Iowa to Oklahoma City. Held: delivery to the carrier for the account of the consignee had the same effect as delivery to the consignee); Universal Features Advertising Co. v. Pettit, 199 Okl. 213, 185 P.2d 197 (1947); Pabst Brewing Co. v. Smith, 39 Okl. 403, 135 P. 381 (1913) (delivery to the carrier was delivery to the buyer unless there be agreement to the contrary or circumstances showing the intention of the parties to be otherwise); B. Kuppenheimer & Co. v. Levine, 116 Okl. 50, 243 P. 182 (1926) (the usual rule was quoted, delivery to the carrier was delivery to the buyer, but it was not shown to be an f. o. b. shipment); Rose v. Woldert Grocery Co., 54 Okl. 566, 154 P. 531 (1916).

Previous Oklahoma decisions held that, for risk of loss to pass, conforming goods must have been delivered. Roth v. Roach, 115 Okl. 199, 242 P. 201 (1925) (seller notified buyer before order shipped that it could not fill complete order, and buyer did not object until goods which had been damaged in transit arrived. Held: buyer waived shipment of nonconforming goods and thus had risk of loss). Also, previous decisions held the seller must have declared the true value, and releasing the goods at a lesser value, which sacrified the buyer's rights of indemnity against the carrier, prevented the passage of the risk of loss. Thomas L. Leedom Co. v. Rosser-Casebeer Furniture Co., 105 Okl. 278, 232 P. 405 (1925). If the goods were shipped on a seller's order bill of lading, with draft attached, title did not pass. Bower-Venus Grain Co. v. Smith, 84 Okl. 105, 204 P. 265 (1922). The court held that in that situation delivery to the carrier was delivery to the seller. and not to the buyer, and also that the seller intended to retain title to secure payment.

(b) There are no previous Oklahoma decisions.

(c) There are no previous Oklahoma decisions or statutes. If, in addition to the usual F.O.B. quotation, the seller adds the words "vessel, car, etc." the seller, in addition to his obligations specified in (a) and (b) must load the goods. This section is ambiguous. F.O.B. means "free on board"-that is, loaded. What, then, is the meaning of (c). For illustration, the buyer ordered heavy equipment which is expensive to load. If the terms of the contract is simply F.O.B origin, who has the expense of loading? It is the custom that the seller bears the expense, but the Commercial Code may indicate that the buyer must load, unless the additional term "car" is added. To avoid a conflict of interpretation, this section must be construed, not to limit the seller's obligation in (a) and (b) but to impose new or additional obligations in situations not otherwise governed by (a) and (b).

(2) There are no previous Oklahoma decisions. The Commercial Code is consistent with the prevailing view and commercial understanding, with one exception. There is some previous authority that the seller's duty is to deliver to the dock - not "alongside vessel." Thus, if the vessel has not yet arrived, delivery to the dock was a compliance with the seller's duty, and risk of loss passes to the buyer. Under the Commercial Code, it does not pass until the vessel has arrived.

(3) There are no previous Oklahoma decisions. This section is consistent with the Commercial Code's policy of requiring cooperation, and permitting the performing party to treat the failure of cooperation as a breach, or to permit him to perform in any reasonable manner. Note that in F.A.S. or F.O.B. vessel the buyer has the obligation of obtaining the carrier.

(4) There are no previous Oklahoma decisions.