by Jason Odgers, SVP, World Insurance
Providing a client with the opportunity to review and understand the Terms & Conditions of a contract is vital to successfully defending a claim. Also important is recognizing the difference between T&Cs of Carriage vs. Service.
T&Cs of Carriage:
T&Cs of Carriage define the relationship between and responsibilities of both the common carrier and the cargo owner. Typically, they are recorded on the back of a Bill of Lading (BoL); however, BoLs often are not issued until after cargo is tendered and transit has commenced. It is important to provide access to these T&Cs in an environment that is separate from the transportation transaction.
T&Cs of Service:
T&Cs of Service define the relationship between and responsibilities of both the transportation intermediary and its client. When an intermediary is not acting as a common carrier and not issuing BoLs (i.e., ocean freight/air freight forwarder, custom house broker, domestic property broker, etc.), T&Cs of Service are used in lieu of T&Cs of Carriage.
Following are some best practices employed within the industry for consideration:
- T&Cs of Carriage should be printed on the back of all house BoLs
- Warehouse T&Cs should be printed on the back of all warehouse receipts
- T&Cs of Service and Carriage should be published (and be easily accessible) on the company’s website
- Many intermediaries append T&Cs of Service to their standard credit applications
- Many intermediaries provide specimen copies of both T&Cs of Service and T&Cs of Carriage in “new customer orientation packets,” which are delivered during the onboarding process
- Some intermediaries require T&Cs of Service to be signed/acknowledged by new clients and then the executed documents are scanned into the company’s TMS/CRM system
- Many intermediaries mandate their employees utilize standard format auto-signature blocks in their email accounts. In these signature blocks, they sometimes include hyperlinks that provide one-click access to the T&Cs of Service and Carriage on the company’s website.
Ultimately, it is impossible to overcommunicate your T&Cs of Service and Carriage. The greater the opportunities clients have to educate themselves regarding your limitations of liability, the more likely those limitations will hold up in the event of a claim/suit.