BIFAlink
Legal Eagle
www.bifa.org
Know your BIFA Standard Trading Conditions – Clause 4
In this month’s edition of BIFAlink we turn to the section of the BIFA Standard Trading Conditions (STC) headed ‘The Company’. In this part of the STC there are 13 clauses numbered 4 to 16 and they describe the role of the freight forwarder in the provision of services to the customer. Certain rights are stated and what actions the forwarder can take in certain circumstances.
care towards his Customer’s interests and in the choice of contractors but may escape liability for the actual performance, such as damage or loss arising during the carriage of the goods or from their packing or handling. As a principal, a BIFA Member has responsibility for the performance of the contract but does not have to concern himself with the Customer’s interests beyond that task. In practice, a BIFA Member can sometimes act both as an agent and as a principal – a ‘mixed contract’ – for example by acting as an agent for the packing and as a principal for the carriage of goods, or vice versa. When a BIFA Member’s own staff perform a task then it usually acts as a principal. When a BIFA Member operates his own groupage or consolidation service, it is as a principal. When a BIFA Member issues his own bill of lading or own air waybill, it is as a principal. When a BIFA Member acts as a ‘house agent’ for the Customer, acting as a traditional forwarding agent booking space with the shipping company and paying freight, etc, on behalf of the Customer, then the BIFA Member acts as an agent. However, the distinctions are not always that clear. Generally speaking, if there is doubt, the BIFA Member probably acted as a principal. A BIFA Member can have a different agency role – that as agent for the principal carrier. For example, this may arise when the BIFA Member acts as the English agent of an overseas carrier, issuing transport documents that clearly show the overseas company as the carrier or receiving goods on behalf of the overseas carrier. The BIFA Member’s obligations are then predominantly to his overseas principal. Notification of a claim to the BIFA Member as such an Agent is tantamount to notification to the overseas carrier, and the transaction may be subject to the trading conditions of the overseas carrier, even when its English agent is a BIFA Member. This clause gives the BIFA Member full discretion as to how any service is performed, whether acting as an agent or as a principal. However, the interests of the Customer or Owner must be observed and if a particular means, route or procedure is specified by the Customer or Owner, care must be taken that there is not blatant breach of contract. See also Clause 6 (A) for when the BIFA Member acts as an agent.
CLAUSE 4 This clause gives the BIFA Member a liberty to act as an agent or as a principal. The BIFA Member will have differing responsibilities and liabilities according to which role applies. Clauses 11 and 12 are referred to as an exception because it is deemed that a BIFA Member always acts as an agent when arranging insurance or when arranging conditional delivery or release of goods or documents by the use of third parties. It can be difficult to decide whether a BIFA Member acts as an agent or as a principal. The following points should be taken into account (not all need apply): 1. A BIFA Member is not an agent simply because he believes he is an agent, or says he is an agent, or has the word ‘Agent’ or ‘Agency’ in the company name. 2. A BIFA Member can be a principal (carrier) even if he does not own any vehicles or other transport equipment. He can sub-contract. 3. The impression of his role given by the BIFA Member to the Customer and whether the Customer had the expectation that the BIFA Member would assume the role of principal, sub-contracting as necessary, or whether the BIFA Member would act as a forwarding agent making arrangements on the Customer’s behalf with other carriers. If a BIFA Member deceives a Customer by advertising, or promises that it operates certain services when in fact it does not, it will probably be deemed to have acted as a principal and denied any assertion that it acted as an agent. 4. Whether the identity of the actual carrier was revealed at the time of shipment. 5. Whether or not the BIFA Member quoted and/or charged a lump sum or gave a breakdown of freight and ancillary charges. This point is of less importance than in the
past because charges are commonly aggregated to be zero-rated for VAT purposes. 6. Whether or not freight and other charges were charged by the BIFA Member according to the carrier’s charges with a modest agency charge added for profit. At English common law, an agent has no right to a secret profit but a principal is free to make whatever profit he can get without the need for disclosure. 7. Would the BIFA Member be comfortable in revealing to his Customer the amount of the invoice paid to the carrier or other third party? 8. Whether the BIFA Member deals with the
Customer in a general way for several destinations by one or more modes of
transport, or whether the BIFA Member was chosen for a particular job or a particular destination. 9. Whether or not the BIFA Member can comply with Clause 6(B) 10. If a BIFA Member has acted on instructions from his Customer to contract with a carrier nominated by his Customer, the BIFA Member will be deemed to have acted as an agent and not as a principal (unless there are very unusual overriding circumstances). It is a fallacy to assert that the BIFA Member has less liability as an agent than as a principal. The truth is that a BIFA Member’s liability as an agent is different from that of a principal. As an agent, a BIFA Member owes a higher duty of
16
August 2022
Made with FlippingBook Annual report maker