Ex-factory is a sales term that indicates the moment when ownership of goods transfers from the seller to the buyer. This transfer typically occurs when the goods leave the seller's premises. At this point, the buyer assumes responsibility for any loss or damage to the goods, as well as the costs associated with shipping.
The term ex-factory is commonly used in sales contracts and shipping agreements. It is particularly relevant in the fields of commercial law and contract law. Understanding this term is essential for buyers and sellers, as it defines liability and responsibility regarding the goods being sold. Users can manage related documents, such as sales agreements or shipping contracts, using templates available through US Legal Forms.
Here are a couple of examples of abatement:
For instance, if a furniture manufacturer sells a set of chairs to a retailer and the chairs are loaded onto a truck at the manufacturer's warehouse, the title transfers to the retailer at that moment. From this point, if the chairs are damaged during transit, the retailer is responsible for the loss. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Notes |
|---|---|
| California | Ex-factory terms are often included in sales contracts to clarify liability. |
| New York | Commonly used in commercial transactions, with specific regulations on liability. |
| Texas | Ex-factory terms may vary based on local business practices. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Ex-Factory | Transfer of ownership at the seller's dock. | Liability shifts to the buyer upon leaving the seller's premises. |
| FOB (Free on Board) | Ownership transfer point determined by shipping terms. | Liability may depend on the shipping destination. |
| Ex-Ship | Ownership remains with the seller until goods reach the buyer's location. | Liability stays with the seller during transit. |
If you are involved in a transaction where ex-factory terms apply, ensure that you understand your obligations regarding shipping and liability. Review your sales contract carefully. If you're unsure about the implications, consider consulting a legal professional. You can also explore US Legal Forms for templates that can help you draft or review your agreements.
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Ex-factory refers to the point when ownership of goods transfers from the seller to the buyer, typically when the goods leave the seller's premises.