Conditions of carriage: don’t do business without them

Taking risks is part of life and it makes sense to minimise those risks wherever possible, from looking both ways when crossing a road to protecting your business from unwelcome and unexpected bills.

Under common law, haulage operators could be responsible for the full value of the load and for any losses due to non-delivery or damaged delivery, so limiting risk with regard to goods in transit is crucial.

Model conditions of carriage are available to members of industry bodies, such as the Road Haulage Association (RHA) and the Freight Transport Association. These provide contractual terms defining the carrier’s and the customer’s responsibilities and compensation levels should the goods be damaged or lost. Adopting such conditions can also help to reduce goods in transit insurance premiums

As the RHA puts in, the conditions allow “a reasonable contractual balance to be struck between the interests of members as carriers and those of their customers”.

However, it is important that such conditions are used correctly or they could be invalidated and expose the haulier to full financial responsibility for a lost or damaged load or indeed losses arising from that loss or damage.

Correct use includes as simple a step as making a customer aware of the conditions, and obtaining their agreement to use them before agreeing to carry out work for them.

There may be circumstances in which a haulier wishes to vary the conditions for a specific reason or to use a bespoke set of terms tailored specifically for their business. In such circumstances it would be wise to seek professional advice before using or accepting these conditions to ensure that the changes continue to protect the interests of the person seeking to rely on them..

Palmers’ Company Law team can provide expert advice on all aspects of terms and conditions of business and sale of goods and services. For more information, please contact BJ Chong.