20 BULLETIN 266, U. S. DEPARTMENT OP AGRICULTURE. 



of origin. One of the most common difficulties is experienced when 

 a buyer orders a car subject to inspection, and, in case of a decline 

 on the market before delivery is made, refuses acceptance because of 

 some alleged deficiency. If a buyer wishes to refuse a car, it is not 

 hard to find some defect which he can use as a plausible pretext for 

 refusal. 



This matter of rejection depends entirely upon the nature of the 

 implied contract. If the grower ships a car which is under grade, the 

 receiver has a right to refuse it whether the market is declining or 

 advancing. When a buyer makes a purchase "f . o. b. point of origin" 

 he assumes all risk of loss in transit and must see to all claims for 

 damage. On the other hand, if he buys ' 'f . o. b. destination" or buys 

 "on track" at destination the shipper assumes the risk. 



In the absence of special agreement to the contrary, when commodi- 

 ties are delivered to a common carrier for shipment, the title to the 

 goods ordinarily passes to the purchaser when the goods are delivered 

 to the carrier properly tagged and addressed. Usually, discrepancies 

 may be found through which a purchaser can manage to withdraw from 

 his agreement, but where a shipment has been accepted at point of 

 origin it belongs to the purchaser and not to the producer. 



Another objection brought against f. o. b. sales is that they will 

 not expand markets to any great extent. In order to expand a 

 market the representative of the selling association or the shipper 

 must have the privilege of making sales on any terms possible, pro- 

 vided the prices are justified by prevailing market conditions, and 

 provided sales are always made subject to confirmation by the 

 shipper. 



This question of the relative advantages of sales on f. o. b. terms 

 and sales ' 'on track" at destination is one over which the managers of 

 the large cooperative associations in the country differ greatly. It 

 has been claimed that sales on f. o. b. terms subject to inspection 

 are of no more advantage than sales "on track" at destination, inas- 

 much as in the majority of cases they must depend upon acceptance 

 at destination. To a certain extent this is true. 



On the other hand, advocates of f. o. b. sales claim that when a 

 buyer orders a car on these terms through the city representative of 

 a shipping association, the buyer is really in the market for the 

 supplies ordered. Consequently, when the goods are shipped, there 

 is at least a prospective buyer in sight and the final sale is more 

 likely to be consummated. Even though the market may decline in 

 the interim, the allowance made on account of decline in price is 

 usually not as great as the total drop in the market price. The 

 reason for this is plain. The buyer is in the market for the com- 

 modities and he is depending upon this one source to secure them. 

 Although the market has dropped and he naturally hopes for certain 



