Transportation & International Trade

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Selected UCC Provisions Relating to Terms of Sale as Adopted By the State of Minnesota:


Minn Statute § 336.2-319 F.O.B. and F.A.S. terms

Minnesota Statutes 2000, Table of Chapters Table of contents for Chapter 336 336.2-319 F.O.B. and F.A.S. terms.

1.) Unless otherwise agreed the terms F.O.B. (which means "free on board") at a named place, even though used only in connection with the stated price, is a delivery term under which

(a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this article (section 336.2-504) and bear the expense and risk of putting them into the possession of the carrier; or
(b) when the term is F.O.B. the place of destination, the seller must pay for, and stand the risk of, the transportation of the goods to that place and there tender delivery of them in the manner provided in this article (section 336.2-504);
(c) when under either (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition pay for, and stand the risk of, the loading of the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this article on the form of bill of lading (section 336.2-323).

2.) Unless otherwise agreed the term F.A.S. vessel (which means "free alongside") at a named port, even though used only in connection with the stated price, is a delivery term under which the seller must

(a) pay for, and stand the risk of, the delivery of the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and
(b) obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.

3.) Unless otherwise agreed in any case falling within subsection (1) (a) or (c) or subsection

4.) the buyer must seasonably give any needed instructions for making delivery, including when the term is F.A.S. or F.O.B. the loading berth of the vessel and in an appropriate case its name and sailing date. The seller may treat the failure of needed instructions as a failure of cooperation under this article (section 336.2-311). The seller also has the option to move the goods in any reasonable manner preparatory to delivery or shipment.

5.) Under the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents. HIST: 1965 c 811 s 336.2-319; 1986 c 444 Copyright 2000 by the Office of Revisor of Statutes, State of Minnesota.


Minn Statute § 336.2-320 C.F.F. and C.&F. terms

Minnesota Statutes 2000, Table of Chapters Table of contents for Chapter 336 336.2-320 C.I.F. and C.&> F. terms.

1.) The term C.I.F. means that the price includes in a lump sum the cost of the goods and the insurance and freight to the named destination. The term C.&> F. or C.F. means that the price so includes cost and freight to the named destination.

2.) Unless otherwise agreed and even though used only in connection with the stated price and destination, the term C.I.F. destination or its equivalent requires the seller to pay for, and stand the risk of

(a) putting the goods into the possession of a carrier at the port for shipment and obtaining a negotiable bill or bills of lading covering the entire transportation to the named destination; and
(b) loading the goods and obtaining a receipt from the carrier (which may be contained in the bill of lading) showing that the freight has been paid or provided for; and
(c) obtaining a policy or certificate of insurance, including any war risk insurance, of a kind and on terms then current at the port of shipment in the usual amount, in the currency of the contract, shown to cover the same goods covered by the bill of lading and providing for payment of loss to the order of the buyer or for the account of whom it may concern; but the seller may add to the price the amount of the premium for any such war risk insurance; and
(d) preparing an invoice of the goods and procuring any other documents required to effect shipment or to comply with the contract; and
(e) forwarding and tendering with commercial promptness all the documents in due form and with any endorsement necessary to perfect the buyer's rights.

3.) Unless otherwise agreed the term C.&> F. or its equivalent has the same effect and imposes upon the seller the same obligations and risks as a C.I.F. term except the obligation as to insurance.

4.) Under the term C.I.F. or C.&> F. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents. HIST: 1965 c 811 s 336.2-320; 1986 c 444 Copyright 2000 by the Office of Revisor of Statutes, State of Minnesota.

Minn Statute § 336.2-401 Passing of title; etc.

Minnesota Statutes 2000, Table of Chapters Table of contents for Chapter 336 336.2-401 Passing of title; reservation for security; limited application of this section. Each provision of this article with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other provisions of this article and matters concerning title become material the following rules apply:

1.) Title to goods cannot pass under a contract for sale prior to their identification to the contract (section 336.2-501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this chapter. Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest. Subject to these provisions and to the provisions of the article on secured transactions (article 9), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.

2.) Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest by the bill of lading

(a) if the contract requires or authorizes the seller to send the goods to the buyer but does not require the seller to deliver them at destination, title passes to the buyer at the time and place of shipment; but
(b) if the contract requires delivery at destination, title passes on tender there.

3.) Unless otherwise explicitly agreed where delivery is to be made without moving the goods,

(a) if the seller is to deliver a document of title, title passes at the time when and the place where the seller delivers such documents; or
(b) if the goods are at the time of contracting already identified and no documents are to be delivered, title passes at the time and place of contracting.

4.) A rejection or other refusal by the buyer to receive or retain the goods, whether or not justified, or a justified revocation of acceptance revests title to the goods in the seller. Such revesting occurs by operation of law and is not a "sale." HIST: 1965 c 811 s 336.2-401; 1986 c 444 Copyright 2000 by the Office of Revisor of Statutes, State of Minnesota.

Minn Statute § 336.2-509 Risk of loss in the absence of breach

Minnesota Statutes 2000, Table of Chapters Table of contents for Chapter 336 336.2-509 Risk of loss in the absence of breach.

1.) Where the contract requires or authorizes the seller to ship the goods by carrier

(a) if it does not require the seller to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is under reservation (section 336.2-505); but
(b) if it does require the seller to deliver them at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the buyer when the goods are there duly so tendered as to enable the buyer to take delivery.

2.) Where the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the buyer

(a)on the buyer's receipt of a negotiable document of title covering the goods; or
(b) on acknowledgment by the bailee of the buyer's right to possession of the goods; or
(c) after the buyer's receipt of a nonnegotiable document of title or other written direction to deliver, as provided in subsection (4) (b) of section 336.2-503.

3.) In any case not within subsection (1) or (2), the risk of loss passes to the buyer on receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery.

4.) The provisions of this section are subject to contrary agreement of the parties and to the provisions of this article on sale on approval (section 336.2-327) and on effect of breach on risk of loss (section 336.2-510). HIST: 1965 c 811 s 336.2-509; 1986 c 444 Copyright 2000 by the Office of Revi sor of Statutes, State of Minnesota.

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