If Company A in New York and Company B in Chicago sign a contract that states "FOB Chicago," it means the parties have agreed to a shipment contract and the title and risk of loss passes to Company B when they are placed in the carrier's possession in New York.So,for example,if the goods are destroyed in transit Company B bears the risk of loss.

FOB

Stands for Free On Board, a term used in international shipping indicating that the seller bears the cost of loading goods onto a shipping vessel, while the buyer pays for transportation and insurance.

Shipment Contract

A sales agreement where the seller is obligated to send the goods to a specific destination, and the risk of loss passes to the buyer when the goods are delivered to the carrier.

Risk of Loss

The responsibility for the loss of goods during shipment, transfer, or at any time before the completion of a sale, typically determined by contract terms.