Customer’s obligations towards the Freight Forwarder

The parties to the forwarding contract are the freight forwarder and the principal – each of them has respective rights and obligations. The basic legal act regulating this matter is, of course, the Civil Code, although the content of the existing contract is not without significance. What exactly are the obligations of the principal towards the freight forwarder?

What is a forwarding contract?

Pursuant to article 794 of the Civil Code, by a contract of forwarding, the Freight Forwarder undertakes, against remuneration, within the scope of his activities, to forward or receive a consignment, or to render other services connected with its carriage. The Freight Forwarder may act on his own behalf or on behalf of the Customer.

The forwarding contract belongs to the category of named contracts of the civil law and should not be confused with the contract of carriage of goods or passengers. A characteristic feature of each forwarding contract is a large number of activities which are the responsibility of the forwarder (e.g. loading, customs, transport activities).

Customer in the forwarding contract

One of the parties of the forwarding contract is the Customer – an entity that orders a particular transport operation to the Freight Forwarder. The basic obligation of each Customer is to pay an appropriate remuneration, the amount and method of payment of which should be very precisely regulated in the content of the concluded contract. If the Freight Forwarder’s remuneration has not been agreed upon in the forwarding contract, he is entitled to the remuneration corresponding to the performed work, which is in accordance with the provisions of article 735 of the Civil Code.

One of the main obligations of the Customer is also to correctly specify what he demands from the Freight Forwarder. This should be clearly stated in the agreement so that, in case of any disputes, the parties to the obligation would know who and to what extent was obliged to undertake the specified activities.

Pursuant to article 796 of the Civil Code, if the provisions of the Civil Code concerning the forwarding or special provisions do not stipulate otherwise, the provisions on the contract of mandate shall apply to the forwarding contract accordingly. In practice, this means that the principal may be subject to the legal regulations applicable to contracts of mandate. The principal is obliged under the contract to cover the expenditures of the Freight Forwarder for proper performance of the contract and to relieve him from any liabilities incurred for that purpose – this may be effected by the payment of an appropriate sum of money or by assumption of debt.

Customer’s duties towards the Freight Forwarder

Payment of remuneration and correct specification of the order are among the basic obligations of the principal towards the Freight Forwarder – in fact, they determine proper execution of the whole agreement concluded. The order does not have to be in writing to be valid, however, to avoid misunderstandings and irregularities in its execution it is recommended to issue or confirm it in writing. The Freight Forwarder is not responsible for the consequences of errors and misunderstandings resulting from orders received verbally or by telephone.

As far as the issue of a correctly marked order is concerned, most often we can find in forwarding contracts a provision that the order should contain all necessary information about the consignment and its properties, and in particular marks and numbers of particular pieces (packages), their number, weight, dimensions, cubic capacity, number and kind of containers, as well as indication whether the goods constituting the consignment are on the list of strategic goods, including dual-use or armament goods, and also define the scope of ordered service and all other data and documents necessary for proper execution of the order.

The Customer is obliged to provide a complete and correct order. The Customer is liable for any and all consequences towards the Freight Forwarder and third parties resulting from inaccurate, incomplete and incorrect data contained in the order, including data contained in documents, correspondence and information concerning quantity, weight, dimensions and properties of the consignment, as well as faulty packaging of the consignment etc., even if the inaccuracy, incompleteness or incorrectness was not caused by his fault.

It is worth pointing out that the Freight Forwarder is entitled to condition the execution of the order upon the Customer’s advance payment for the expenses connected with its execution (e.g. freight, port charges, customs dues etc.). The Freight Forwarder can also subject further execution of the order to immediate reimbursement of expenses already incurred. In case of consecutive deliveries the Freight Forwarder is entitled to partial settlement of dues. If the Freight Forwarder, upon the order of his Customer, acts as a shipper or a consignee, and claims are lodged against him (e.g. by the common law or other titles) for which the shipper or the consignee is liable by law, the Customer is obliged to indemnify and protect him against any consequences resulting thereof. If the Freight Forwarder during the execution of the order disburses his own funds, he is entitled to an expediting commission on the disbursed sum. If the amount of the levy is not specified in the tariff or in the agreement with the customer, the levy is at the currently applicable statutory rate of interest.