When does the buyer gain title under FOB factory terms?

Under FOB (Free On Board) factory terms, the buyer gains title to the goods when they leave the seller's facility. This means that the buyer assumes risk and ownership at the point the goods are shipped from the seller’s location. The implication of this term is that the buyer is responsible for the goods as soon as they are dispatched, which includes any liability associated with transportation or damages that may occur after leaving the seller's facility.

This arrangement contrasts with other terms where the transfer of ownership may occur at different points, such as upon receipt of goods (which typically occurs under FOB destination terms). Hence, the clarity of FOB factory terms highlights that the transaction's title and risk shift at the moment the seller ships the goods, establishing a clear demarcation in the responsibilities of both parties in the transaction.