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Date: 2013-08-05

Trading Conditions and Limiting Liability for Freight Forwarders

All businesses are subject to a wide range of statutory regulations - such as employment law, health and safety, public liability and accounting standards. There are also legal issues which specifically affect freight forwarders and their customers.


The role of the freight forwarder is to make arrangements which enable goods to travel from seller to buyer. This often involves a journey of several thousand miles, using more than one mode of transport.


There must have been a sale - and contract - agreed between a seller and buyer for the supply of goods before a freight forwarder is needed. Many of the elements of this contract impact directly on the nature and detail of the contract eventually agreed between the forwarder and their client - which could be the seller or buyer of the goods.


Trading conditions

To ensure the client and the forwarder fully understand - and agree upon - their responsibilities in the transportation process, the client must be made aware of the forwarder's trading conditions. This needs to be done before details of the contract are agreed - ideally at the quotation stage.


Trading conditions establish the circumstances under which any service is provided and usually include limiting the forwarder's liability in the event of a claim against them. Failure to do this could leave the forwarder with unlimited liability - which could prove very costly.


Trading conditions also:


ensure the client knows their goods are not automatically insured

provide safeguards to help ensure the forwarder is paid once the job is done

protect the forwarder if the client fails to fully disclose the contents of a consignment, eg hazardous material or goods of an exceptionally high value


Forwarders who are members of the British International Freight Association (BIFA) will often base their contract on the BIFA 2005 Standard Trading Conditions. These conditions are for the exclusive use of BIFA members and a forwarder must join BIFA before they are allowed to use them. This is an easier - and cheaper - option than paying a solicitor to draft separate conditions for each contract.


Despite being able to limit liability, the freight forwarder still has some level of responsibility for loss and damage to goods.


Conventions

All transport is subject to national and international laws, and each mode has its own legal regulations that limit the liability of the carrier. These conventions play a similar role to trading conditions.

 

( linda )14 Nov,2011


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