Land Freight Contract: Parties, Terms, and Liabilities
Land Freight Transport Contract
A land freight transport contract is an agreement where one party (the carrier) undertakes, in exchange for a fee paid by the shipper, to transfer goods from one place to another and make them available to the person designated in the contract (the consignee).
Contract Elements
Parties Involved
- Carrier: Assumes the obligation to perform the transport in their own name, using their own transport facilities or those of others. There may be multiple carriers involved.
- Shipper (or Sender): The party who engages the carrier in their own name to carry out the transport.
- Consignee: The person designated to receive the goods.
- Note: A fourth party may sometimes be involved, acting on behalf of the shipper to deliver the goods for transport. Outsourcing is common in this field.
If multiple carriers are involved, they typically assume joint liability towards the shipper. If the primary carrier subcontracts to another carrier, the primary carrier remains responsible to the shipper.
Key Document
- Consignment Note: This document formalizes the contract, details the parties (shipper, carrier), the goods, and outlines liability terms. Possession of the document often signifies rights over the goods during transit.
Shipper’s Obligations
- Deliver the goods to the carrier in suitable condition for transport.
- Submit all necessary documents related to the goods (e.g., consignment note, licenses, customs documents).
- Pay the transport fee if it is prepaid transportation.
- Has the right to inspect the goods as per the agreement.
Carrier’s Obligations
- Receive the goods from the shipper. Note: The carrier can refuse the goods if they are not in suitable condition for transport.
- Transport the goods according to the agreed schedule and within the stipulated time.
- Safeguard the goods during transport.
- Deliver the goods in good condition to the designated consignee.
- Collect the transport fee if payment upon delivery (postage due) has been agreed.
- The carrier has a lien on the goods (right to retain them) if the agreed remuneration is not received.
Consignee’s Obligations and Rights
- Receive the goods upon delivery.
- Pay the transport fee only if it is designated as postage due. Otherwise, the primary obligation is simply to receive the goods.
- If the consignee refuses to receive the goods, the carrier may proceed with a legal deposit or follow procedures outlined in the contract or law.
Right to Refuse Delivery
The consignee may have the right to refuse delivery in specific cases, such as:
- When only part of the goods is delivered (with proof).
- In case of visible damage or deterioration of the goods.
- When delivery is significantly delayed beyond the agreed date (subject to contract terms and applicable law, e.g., potentially after 20 days).
Carrier’s Responsibility and Liability
The carrier generally bears the risk for the goods during transport and is liable for damages or losses, unless they can prove the issue resulted from:
- Inherent defects of the goods.
- An unavoidable accident or force majeure (circumstances beyond their control).
- Fault of the shipper or consignee.
The burden of proof typically lies with the carrier to demonstrate these exceptions.
Types of Liability
- Liability for Loss or Damage (Ex Recepto – arising from receipt): This covers direct damages to or loss of the goods. Liability might be limited based on the declared value or terms in the consignment note. Claims often need to be reported promptly (e.g., within 24 hours or as specified) after delivery or expected delivery.
- Liability for Delay (Ex Contractu – arising from contract): If delivery is delayed beyond the agreed time, the carrier may be liable for damages caused by the delay. Compensation might be stipulated in the consignment note or calculated based on the actual damages incurred by the recipient, often subject to contractual or legal limits.