Legal
BIFAlink
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Know your BIFA Standard Trading Conditions: Clauses 5 and 6
CLAUSE 5 When the Company contracts as a principal for any services, it shall have full liberty to perform such services itself, or, to sub-contract on any terms whatsoever, the whole or any part of such services. This clause includes the unequivocal liberty to sub-contract to any extent when acting as a Principal. Sub-contracting is common in freight forwarding and it is usually inevitable with respect to carriage, Customs clearance and other operations within an overseas country. The terms and conditions under which the sub- contractor operates may, overall, be less onerous than the BIFA 2021 STC. If so, that is a burden the BIFA Member must accept when he acts as a Principal because the BIFA 2021 STC still apply to his contract with his Customer. CLAUSE 6 (A) When the Company acts as an agent on behalf of the Customer, the Company shall be entitled, and the Customer hereby expressly authorises the Company, to enter into all and any contracts on behalf of the Customer as may be necessary or desirable to fulfil the Customer’s instructions, and whether such contracts are subject to the trading conditions of the parties with whom such contracts are made, or otherwise. This liberty clause applies when the Company acts as an agent for the Customer. It permits freedom of action subject to the overriding Continuing our examination of the BIFA Standard Trading Conditions (STC), in this edition of BIFAlink we study two clauses numbered 5 and 6. It is worth cross-referring to last month’s examination of clause 4 as clauses 4, 5 and 6 are closely related
obligation to act in the Customer’s interests. The clause also stresses that such contracts entered into on behalf of the Customer are subject to the trading conditions of the parties with whom the contracts are made. However, the BIFA Member’s own acts or omissions are subject to the BIFA 2021 STC. CLAUSE 6 (B) The Company shall, within 14 days’ notice given by the Customer, provide evidence of any contract entered into as agent for the Customer. Insofar as the Company may be in default of the obligation to provide such evidence, it shall be deemed to have contracted with the Customer as a principal for the performance of the Customer’s instructions. As stated in the last edition of BIFAlink when we looked at Clause 4 (A), it is not always easy to
determine whether the BIFA Member has acted as an agent or as a principal. If an agency role is claimed, it can usually be evidenced, for example, by the submission of a document such as a bill of lading or air waybill which shows the identity of the actual carrier (principal) and shows the Customer as the shipper. It is not unusual for a Customer to be unaware of the identity of the carrier as specific instructions may not have been given in that respect, it being left to the BIFA Member to contract as he thinks fit. If no such evidence (which need not be a transport document) can be produced, it is likely that the BIFA Member did act as a principal. This clause states that in the absence of such evidence, the BIFA Member will be deemed to have acted as a principal. Such evidence is given only on demand to establish whether the BIFA Member acted as agent or principal.
September 2022
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