Describes a contractual agreement by a seller to deliver goods to a specified place without expense to the buyer, in which the seller assumes all delivery expenses and risks; such a contract is called an f.o.b. contract. ABBRV. FOB. free trade agreement. An agreement between two or more nations, states, or other geographic units that requires each member to allow other members to sell specified goods freely within its territory, without imposing tariffs or duties. See also North American Free...