The use of trade terms in cargo transportation

Both parties in international trade usually use international trade terms in their contracts to make agreements on the mode of transportation of the goods and the division of risks, who is responsible for handling import and export customs clearance procedures, and booking transportation with the carrier. Although this kind of agreement between buyers and sellers has no direct binding force on the transportation and freight forwarding contracts, generally speaking, the buyer or seller of international trade sales will perform their obligations during the transportation process in accordance with the agreement of the trade contract. There is usually a specific connection between their expressions of intent and legal status in the two interrelated contracts of sale and transportation.

In the trial of maritime cargo contracts and freight forwarding contracts, written entrustment agreements, booking agreements or bills of lading are the basis for reviewing the legal relationship and rights and obligations between the parties. From the perspective of litigation evidence, it is difficult to determine the content of the fax or oral agreement when a dispute arises. The judge often needs to comprehensively refer to the surface record of the bill of lading, the behavior of the parties and the trade terms agreed in the trade contract and other terms related to transportation. , Based on this, make reasonable judgments on the true intentions and rights and obligations of the parties involved in the transportation and freight forwarding relationship.

For example, the buyer and the seller agree in the trade contract that the transaction is done on FOB price terms, and the seller will contact the freight forwarding company designated by the buyer for the delivery of the goods and exchange it for Ship A’s bill of lading, and collect the payment accordingly. The seller then handed over the goods and export customs clearance documents to the freight forwarding company, and obtained the bill of lading issued by Shipping Company A. The freight forwarding company went through the customs clearance procedures for the export of the goods on behalf of the seller, and entrusted Shipping Company B to transport the goods in the name of the buyer and handed them to the buyer, who would pay the freight. After that, the seller entrusted the bank to collect collection from the buyer with the bill of lading of Ship A, and the bill was refunded. After investigation, the ship company A has not been registered for industrial and commercial registration, and its whereabouts are unknown. The seller sued the freight forwarding company on the grounds of disputes over the freight forwarding contract, on the grounds that the freight forwarding company accepted the seller's entrustment to book and ship the goods, and had the agency duty of carefully selecting qualified carriers for the client. The freight forwarding company handed the bill of lading to the seller, which did not have the qualifications of the carrier, to the seller, which caused the seller to be unable to recover the compensation from the carrier and should bear the responsibility for the fault of the agency. The freight forwarding company argued that it accepted the buyer’s fax entrustment, received the goods on behalf of the buyer, forwarded the bill of lading to Shipping Company A, and entrusted Shipping Company B to actually complete the transportation of the goods and deliver them to the buyer. In this case, there was no written entrustment agreement between the seller and the freight forwarding company, and the seller did not recognize the authenticity of the buyer’s fax entrustment documents provided by the forwarding company; the dispute between the two parties in the litigation was whether there was an entrusted booking relationship between the seller and the freight forwarding company.

Quoted from Shipxun.com