Shipping contracts, also called transportation-related contracts (TFRs), are legal documents that establish the terms and conditions of a commercial agreement between the shipper and the carrier. The contract is an agreement that details how the goods will be transported, when they will be transported, how the payment will be made, what conditions must be met during shipment, etc. The contract should be between both parties, not the agents or representatives of one or the other. In shipping, the contract is considered to be an important document since it serves as a binding agreement between the two parties. It also serves as a means of shipment contract protecting the rights of one party from the other party.
These contracts have various forms, each having different purposes and specific details. For a contract to be considered legal, it should have certain features. For instance, in a shipment-relat contract between the shipper and the carrier, there should be a specific schedule of when the goods are to be a ship, the type of goods that are to be a ship, the place where they are to be a ship, the type of service to be provided by the shipper, etc. In addition, the contract has to state what measures the carrier will take in case there are accidents while the shipment is in transit.
Although the carrier does not have to be an agent of the seller, the contract serves as legal evidence if the seller has to go through litigation over the delivery of the goods. For instance, if there is damage to the goods while in transit, the carrier can use the shipment contracts as evidence that the seller is responsible for such damages. The contract may specify the actions the seller should take should there be damage to the goods while in transit. If there is damage, the seller should pay for it and reimburse the expenses incurred. In short, the shipper expects the carrier to act reasonably and appropriately, paying the necessary expenses and preserving the goods.
Since the shipper is usually the seller, it is also important for him to read carefully the shipment contracts to make sure that he is not signing one that waives or breaks any of his rights. For instance, it is not valid to sign a contract that waives the sellers right to return the goods if there is a mistake or defect in them. Likewise, it is also not valid for the seller to sell goods that do not comply with the stipulated regulations laid down by the government especially when those goods are produced overseas.
In addition, the contracts should contain clauses that protect both the seller and the buyer. For instance, it is important to protect the seller from a breach of warranty. The contract should protect the buyer from breach of business interruption. Both sides should agree on all terms of the contract, including the amount to be paid and the responsibilities of each party in case there is a breach or a mistake.
When a contract is signed, both parties are obligated to honor it. If there is a dispute, then the courts should have jurisdiction to enforce it. In cases of breach, the seller might be liable for damages while the buyer could also be for breach of contract, negligence, and breach of express warranties. It should be kept in mind that reasonable time, mileage, and storage charges should be paid by both the party, and the expenses related to the delivery of the goods should also be borne by both parties.
Covers the shipment
In general, shipment contracts may cover the whole shipment or just a part of it. If the entire contract is a concern, then the contract includes all the clauses listed in the invoice. However, if the contract only covers the shipment, the shipper can notify the seller about the delivery information, the mode of payment, and other terms related to the shipment. This is done in the claimer section of the shipment.
It is important that the shipper pay for the shipment. If the shipper does not pay, the carrier may have the right to resell the goods. The buyer will be responsible for paying for the transportation costs. The carrier will take note of this, and if the carrier agrees to the warehousing, the carrier will also charge the buyer for the shipment.