Haulage companies operate under contracts to move goods from A to B. By agreeing to transport goods, you have formed a contract so contract law is therefore at the very heart of every haulage business. The question asked (often following a disagreement or incident) is-“ what exactly does your contract state?”
If you operate under ‘standard terms and conditions’, this may seem like a relatively straight forward question. The answer in reality is often more complicated than first thought. Often problems arise when conditions of carriage are updated and amended, or with new clients who are not aware of your trading conditions.
As an example, you may be a registered member of the RHA. One of the reasons you may have joined is to take advantage of the RHA ‘Conditions of Carriage’ as they can dramatically reduce your financial risk and liability for damaged or lost goods. Unfortunately, if they are not used correctly, it is possible they will not form part of the contract with the customer and your liability could revert to conditions found in common law, which can increase your liability.
At the heart of contract law is the importance of placement and visibility, ie exactly where you incorporate your conditions of carriage within your contracts. You must make sure that the other party accepts those terms before you do whatever it is you offered, and you must be able to provide evidence they have accepted your terms. It’s all about transparency and good communication.
For example, including your conditions on an invoice (rather than your quote), means you are unlikely to have correctly incorporated your terms into the contract.
Helpful tips
Here are some simple points you can easily implement: (This is by no means an exhaustive list)
- If you are agreeing a contract on the phone with a customer, refer to your terms and conditions and confirm to them that those terms will be used in the contract. You should send a copy of the terms immediately afterwards and confirm in writing that these terms form part of the contract.
- Send a copy of the terms and conditions with any written quote and confirm that, should the customer place an order, it will be subject to those terms and conditions.
- If your customer sends their own terms and conditions to you with their order, confirm to them in writing that you will not accept those terms and that any trading relationship must subject to your own terms and conditions (and supply a copy).
- Display your terms and conditions on your website and/or in your brochure.
- If you have updated your conditions: “Please note that as from the _ day of _ year_ goods will be accepted for carriage only subject to the RHA Conditions of Carriage 2009 a copy of which is attached/available on request”. (Older or no conditions remain valid until you have told your customer of the change)
- Include at the foot of all letterheads, quotation forms, fax forms, emailed documents, confirmation forms and notes, consignment notes and invoices etc: “Goods are accepted for carriage (and sub-contracted) only subject to the RHA Conditions of Carriage 2009 a copy of which is available on request.
- If possible, obtain express written consent/acknowledgement from your customer of acceptance of your conditions
- Retain recorded delivery receipts and copies of correspondence, maintaining a permanent record of customers and sub-contractors and the dates on which they were advised
You can never completely eradicate your risks and liability, but you can drastically reduce them. We recommend adopting the tips above as part of your existing risk management strategy:
If you have any questions or queries relating to this or any other topic, I am happy to answer any questions on
Mobile: 07944 676469 or
Email: benn.houghton@rhainsuranceservices.uk.net