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Free Carrier or FCA: A Comprehensive Guide to Its Legal Implications
Definition & Meaning
The term "Free Carrier" (FCA) refers to a shipping arrangement commonly used in international sales contracts. Under this agreement, the seller is responsible for delivering goods to a carrier chosen by the buyer. The seller's obligations are fulfilled once the goods are delivered to the specified location, cleared for export, and handed over to the buyer's designated carrier. At this point, the buyer assumes responsibility for the goods, including any associated costs and risks, as they take charge of the shipment.
Table of content
Legal Use & context
The Free Carrier term is primarily used in international trade law and contracts. It is relevant in the context of shipping agreements and logistics, where it defines the responsibilities of buyers and sellers in the transfer of goods. This term is particularly significant for businesses engaged in import and export activities. Users can manage these agreements through legal templates available on platforms like US Legal Forms, which provide resources drafted by legal professionals.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A seller in the United States sells machinery to a buyer in Germany. The seller delivers the machinery to a freight forwarder at a designated airport in the U.S., cleared for export. Once the freight forwarder takes possession, the buyer assumes all risks and costs associated with the shipment.
Example 2: A manufacturer in China sells textiles to a retailer in Canada. The manufacturer delivers the goods to the carrier chosen by the retailer at a specified terminal. The retailer is responsible for the transportation costs and any risks once the carrier takes charge of the textiles.
Comparison with related terms
Term
Definition
Key Differences
Free on Board (FOB)
The seller delivers goods on board a vessel chosen by the buyer.
FOB transfers risk at the shipping point, while FCA does so upon delivery to the carrier.
Cost, Insurance, and Freight (CIF)
The seller covers costs, insurance, and freight to a specified destination.
CIF includes insurance and freight costs, whereas FCA does not.
Common misunderstandings
What to do if this term applies to you
If you are involved in a transaction where FCA is applicable, ensure that you clearly outline the responsibilities of both parties in your sales contract. Consider using legal templates from US Legal Forms to create a comprehensive agreement. If the situation is complex or involves significant financial implications, consulting a legal professional is advisable.
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Typical fees: Varies based on shipping and carrier costs.
Jurisdiction: International trade law.
Risk transfer: At the moment the carrier takes charge of the goods.
Key takeaways
Frequently asked questions
FCA stands for Free Carrier, which indicates that the seller delivers goods to a carrier chosen by the buyer, transferring risk and costs to the buyer at that point.
The buyer is responsible for the main transportation costs once the seller delivers the goods to the carrier.
Yes, while FCA is commonly used in international trade, it can also apply to domestic transactions.