I (Meaning and importance of Exports) Unit Structure

10.9.2 TYPES OF QUOTATIONS 
 
 
The important types of quotations are as follows. 
I) FOB (Free On Board) Quotation 
Under FOB quotation, the seller quotes a price which 
includes all expenses incurred till the goods are actually loaded on 
board the ship. This means packing charges, local transport 
charges and dock dues are covered in the price quoted. Even the 
expected profit is included in the FOB price. 
In short, FOB price can be summed up as follows 
FOB price = cost of production + profit margin + expenses up to on
on board the ship - export incentives 
Seller‘s obligations under FOB quotation 
1. He has to load the goods on board the ship named by the buyer. 
2. He has to obtain bill of lading from the shipping company and
forward it to buyer to enable him to take delivery of goods. 
3. He must inform the buyer certain details like the name of the ship 
and the possible date of delivery. 
4. He has to arrange for the necessary space in the vessel. 
5. He must inform the buyer without delay that the goods have 
been delivered on board the vessel of aircraft. 
Buyer‘s Obligations under FOB Quotation. 
1. 
He should inform the seller the name of the ship by which 
the goods are tot be sent and also the expected date of 
delivery. 
2. 
He has to bear the risk when goods are loaded on the ship. 
3. 
He should make payment to the exporter as per the terms of 
contract. 
Under FOB quotation the seller has no right of lien on goods 
and that of stoppage in transit, because the shipping company is 
deemed to the agent of the buyer. As per the law, delivery to the 
buyer‟s agent is treated as delivery to the buyer himself. 
II) C&F Quotation (Cost and Freight) 

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C&F means cost plus freight. The price quoted includes total 
cost of goods, packing, carriage, loading charges and the payment 
of freight up to the part of destination. The other expenses like 
cartage, unloading charges and expenses of carrying the goods 
from the part of delivery to the warehouse are to be borne by the 
importer. Insurance charges are also to be borne by the importer. 
In short, C&F price can be summed up as-