Arrangement for Third-Party Freight Hauling and Logistics Services
In the realm of logistics, transportation brokers play a crucial role in coordinating the movement of goods from one point to another. However, their responsibilities extend beyond mere coordination, and understanding their legal liabilities is essential for all parties involved.
Broker's Liability in Cargo Transportation
When it comes to cargo transportation, brokers are primarily liable for loss, damage, or delay of goods under their responsibility or during subcontracted transportation. In many jurisdictions, such as the United States, this liability is governed by laws like the Carmack Amendment (49 U.S.C. § 14706), which holds carriers liable for full actual loss or damage unless otherwise agreed. Brokers, who typically arrange transportation, can be responsible for losses due to their failure to properly select or supervise carriers.
Limiting Broker's Liability
To limit their liability, brokers often contractually designate that the actual carrier assumes cargo liability. The broker's liability arises if they fail to comply with contractual obligations or if the carrier fails, making the broker partially liable under forwarding agency principles.
Insurance and Liability Limits
Most brokers carry logistics liability insurance, also known as professional civil liability coverage, to protect against claims for cargo loss, damage, or theft, including legal defense costs. Contractual liability limits may include caps on the broker's exposure for cargo value, often reflecting industry standards.
Asset Purchase Agreements and Transportation Brokers
When purchasing digital assets such as a website, mobile app, or other digital assets, the Digital Asset Purchase Agreement template can be useful. This template ensures the buyer is purchasing only the assets, not liabilities. In the context of transportation, an Asset Purchase Agreement is beneficial when a buyer wants to buy only the assets, not the whole company.
Other Considerations
Force Majeure events excuse non-performance or defective performance under this Agreement, but parties must still pay what they owe regardless of whether there is Force Majeure or not. Both the Broker and Carriers are required to maintain adequate insurance.
It is important to note that this article focuses on legal responsibilities of brokers in international software sales and does not provide information on the liabilities that the broker may have in international software sales or how brokers help tailor software for buyers. Additionally, the article does not discuss the negotiation process for software deals facilitated by brokers.
In summary, transportation brokers typically face civil liability for cargo loss, damage, or shortage primarily through forwarding agency responsibilities and contractual obligations, often relying on insurance to cover these risks and limiting their liability by transferring primary cargo responsibility to contracted carriers under agreed terms.
- In the field of cargo transportation, brokers are typically liable for losses due to their failure to properly select or supervise carriers, and they may also face civil liability for cargo loss, damage, or shortage primarily through forwarding agency responsibilities and contractual obligations.
- To limit their liability, brokers often contractually designate that the actual carrier assumes cargo liability, and they may carry logistics liability insurance to protect against claims for cargo loss, damage, or theft, including legal defense costs.