Under FOB contracts, the seller undertakes to deliver the goods over the ship’s rail, at which point the risks pass from the seller to the buyer. The seller’s responsibility is to pay all expenses until this point. He is to arrange for insurance up to the point. The buyer is also responsible for insurance from the time he assumes the risks, that is, once the goods pass the ship’s rail. Sellers are responsible to clear customs dues, quality inspection charges and other export related dues. It is important that the shipment term in the bill of lading must carry the wording “Shipped on Board,” it must bear the signature of the transporter or the carrier or his authorized representative with the date on which the goods are boarded. FOB price is inclusive of Ex-Works price, packing charges, transportation charges up to the place of shipment.