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Contracts • Terms of the Contract
K#092
Legal Definition
Generally, FAS is only used when goods are shipped by boat. Risk of loss passes to the buyer once goods are delivered to the dock.
Plain English Explanation
When goods are shipped with an FAS shipping term, then the risk of loss passes to the buyer the moment the goods are delivered to the dock. If at any point the goods are damaged or lost before reaching the dock, the seller bears the risk.
Hypothetical
Hypo 1: Bob is in California, Sam is in Hawaii. Bob sells Sam 100 widgets "FAS". Result: Bob is liable for the risk of loss and expense of shipment until the 100 widgets are delivered to the dock in California. If a hurricane wipes out the boat carrying the widgets 5 miles before it reached the dock in Hawaii, Sam bears the risk. If the hurricane wipes out the dock and goods the moment they are unloaded on the dock in California, Sam bears the risk.
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