Translawyers’ clients often turn to us because there is a dispute not only because of the way in which the transport order was executed but also because of whether it was concluded in the first place. In some cases, carriers also want to be compensated for the cancellation of a carriage by a forwarding agent. Are they entitled to that?
In order to be able to state that a transport order, i.e. a transport contract has been concluded, only three ‘essential elements’ are required (you can find more about controversies when concluding transport contracts in my article on LinkedIn):
- the remuneration to be paid to the carrier (often referred to as the “freight”).
The provisions of the Civil Code do not require any particular form in which the contract of carriage should be concluded. Therefore, it can be documented, written, electronic or even oral form.
Concluding a transport order – consequences of non-performance of the contract.
Very often it happens that the contract is concluded on the communion of the Trans.eu platform or even during a telephone conversation between the carrier or forwarder. It is, therefore, a myth in the industry that a contract is concluded only when the carrier sends back a signed transport order by e-mail or when the time specified in such order expires (the famous ‘30 minutes’ clause, which in most cases is ineffective).
As a rule, you may withdraw from the contract if this is stipulated in the contract. But what if it was not agreed or the party to the contract (carrier or freight forwarder) decided to take such a step before agreeing on the rules concerning the termination of cooperation?
Then the general code rules apply, which means that in case of non-performance of the contract:
“The debtor is obliged to repair damage resulting from non-performance or improper performance of the obligation, unless the non-performance or improper performance is a consequence of circumstances for which the debtor is not responsible” (Article 471 of the Civil Code).
This rule applies to both the carrier and the forwarder, who may also claim compensation in the event of cancellation of the order by the carrier.
Calculation of damage for cancellation of an order.
It is worth remembering that such damage will have to be demonstrated. The amount of damage shall be calculated in accordance with the judgment of the Supreme Court of 11 December 2007 (II CSK 370/07):
“In order to assess the legitimacy of the claim for damages on account of unjustified termination of the contract, it is not sufficient to ascertain how much the injured party would have received if the contract had been performed, but on what damage they suffered. The full amount of the remuneration cannot be identified with the lost benefit because it constitutes revenue. The generation of revenue is combined with certain costs, expenses, taxes and other charges which the affected party would have had to bear and which he avoided as a result of the dissolution.”
This means that the damage to the carrier in the event of cancellation of an order by a forwarder should be calculated as freight from which all costs of carriage (e.g. driver’s remuneration, fuel cost, tolls) should be deducted. This means, de facto, that the damage is the pure profit that the carrier should make. Meanwhile, in case of unlawful cancellation by a carrier, the damage to the freight forwarder could be, for example, the difference in freight that he had to pay to another carrier who took over the order as a substitute.
I would like to warn you that the above-presented position on the calculation of damages in case of cancellation of an order is only one of the concepts that appear in judicial decisions. Unfortunately, courts do not have a uniform position in this respect and the judge’s decision expressed in the judgment is usually based on the individual circumstances of a given case.