A recent High Court decision, Primesite Outdoor Advertising v Salviati & Santori, has dealt with interesting aspects of the relationship between the freight forwarder and its customer.
The facts of the case are, sadly, not uncommon. The plaintiff was a South African exporter of billboards, and had used the freight forwarder's services several times in the past. The plaintiff had concluded a c&f contract with a Belgian importer whereby the bills of lading representing the billboards would be released to the importer on the signature by the importer of an acceptance of a bill of exchange drawn on itself. Evidence was led that the freight forwarder was aware of this arrangement.
The freight forwarder sub-contracted the carriage of the goods to Ecu Line. The goods were carried to Belgium but, somehow, the importer was able to obtain delivery of the goods without production of a bill of lading. The exporter was never paid and held the freight forwarder responsible for its loss.
The first real defence open to the freight forwarder was to try to shift responsibility to Ecu Line. The Court rejected this. Even though the freight forwarder had subcontracted the carriage to Ecu Line, and even though the loss was not its fault, the Court held that it still carried the primary responsibility for the damage suffered by the exporter.
The lesson is clear. A freight forwarder runs the danger of being held liable by its customer for breaches of the contract of carriage even though it subcontracts the carriage to others. One way to reduce this danger is to include in one's standard terms and conditions a clause which deems a contract to exist between the client and the actual carrier. To be effective however, such clauses have to be brought to the attention of the customer.
Next time, we shall see whether the freight forwarder's own terms and conditions were successful in shielding it against its client's claim.
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