Conditions of carriage ‘needs care and attention’

By: Rob McKay

Transport lawyer warns carriers they are vulnerable if this is not handled well and there is cargo damage

Conditions of carriage ‘needs care and attention’
Marcus Saw warns of conditions risk.


Road transport operators who fail to gain proper customer acceptance of their standard conditions of carriage face increased liability and indemnity risks if cargo is damaged, a lawyer warns.

In an aspect of land transport contacts not seen usually in airfreight or shipping, Marcus Saw, a senior associate in the transport and logistics team at CBP Lawyers, tells ATN that, in event of a dispute, a frequent customer argument is the terms and conditions "have not properly been incorporated − or, in other words, agreed to − and therefore do not apply".

"Shipping and airfreight do not necessarily have the same issues with respect to incorporation as the use of bills of lading and air waybills etc and the laws governing them tend to reduce arguments regarding incorporation of … standard terms and conditions," he says, adding that it may also relate to rail, depending on the contract.

In a recent commentary, Saw points out it is industry practice for carriers to seek to exclude liability for negligence, breach of bailment, consequential loss and other causes of action or losses that may arise during the course of carriage. 

Such conditions of carriage are important not only to limit the risk to which a carrier of goods is exposed in the event of loss or damage to goods, but also from the perspective of indemnity under carriers' goods in transit and other similar policies of insurance.

The not uncommon practice of sending invoices after delivery, even when it refers to or even annexes or sets out the carrier's standard conditions of carriage, allows the customer to argue that they were not agreed to.

"Ideally, carriers should request their customers to sign an acknowledgement that the standard conditions apply to the carriage and attach those conditions at the very outset, before any goods are carried," Saw says. 

"Such an acknowledgment can take the form of a properly drafted commercial credit application or consignment note which sets out the terms and conditions, is evidence of the contract of carriage and sets out any instructions given to the carrier." 

He advises care be taken on the wording of the conditions of carriage, "as the courts have historically viewed clauses which exclude liability for loss and damage caused by the carrier or the carrier's agents, strictly.

"Carriers should obtain legal advice to ensure that their standard conditions of carriage will be effective to exclude liability for loss resulting from faults by the carrier."  

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