The freight forwarding contract structures relations in the transport sector. It defines the rights and duties of each party. This agreement differs from the classic transport contract and deserves special attention.
Formation of a freight forwarding contract
The commission contract has specific characteristics in terms of its formation and proof.
No formalities and proof of contract
The commission contract is consensual. The law does not impose any particular rules as to form. It is formed by the simple agreement between the commission agent and his principal.
In practice, contracts are often concluded by telephone, e-mail or fax without any formal writing. As this is a commercial contract, proof is free and can be provided by any means.
However, article L. 1423-3 of the Transport Code requires a written document to be drawn up defining the relationship between the parties. This document must specify:
- The nature and purpose of the transport
- Terms and conditions
- The obligations of the parties
- The agreed services
In the absence of a written agreement, the standard commission contract applies automatically.
Standard transport commission contract
Resulting from the decree of 5 April 2013, the standard commission contract defines the obligations of the commission agent and the principal. It applies in the absence of a written agreement.
This document provides details:
- Obligations to provide information and advice
- Training and implementation procedures
- The extent of liability
- Compensation ceilings
- Payment terms
Unlike standard road transport contracts, this standard contract is not a matter of public policy. The parties may derogate from it in writing.
In practice, many commission agents draw up their own general terms and conditions, based on the standard contract but tailored to their needs.
To understand the full legal regime applicable to this relationship, see our article on the legal status of the freight forwarder.
The commission agent's obligations towards his principal
The commission agent has a number of essential obligations.
Duty to advise
As a professional, the commission agent must advise his customer. Article 5.5 of the standard contract defines this duty. He must:
- Inform the customer of the advantages and disadvantages of the possible modes of transport
- Suggest that you take out goods insurance, a declaration of value or a special interest in delivery
This duty is exercised within the limits of its competence and varies according to the professionalism of the principal. It is less important when dealing with experienced customers.
A breach of the duty to advise constitutes personal misconduct for which the advisor is liable, as explained in our article on the liability of the freight forwarder.
Organisation and care of transport
The main obligation is to organise the transport "from start to finish" and to ensure that the goods arrive at their destination within the agreed time. This is an obligation of result, confirmed by article 5.1 of the standard contract.
The commission agent must:
- Comply with the principal's instructions
- Choosing the appropriate means of transport and equipment
- Selecting competent carriers
- Check essential documents
- Drawing up the necessary documents
- Passing on information to substitutes
- Monitor transport and report problems
He is not obliged to insure the goods unless expressly instructed to do so by the principal. He must, however, check that the carriers chosen are properly insured.
Preservation of the principal's rights
The commission agent must preserve his customer's rights, avoiding their extinction by foreclosure or prescription.
This obligation applies at all stages:
- Taking charge
- During transport
- On delivery
Article 8.2 of the standard contract specifies that the principal may request the commission agent to take the necessary steps to preserve his rights at the time of delivery.
For a complete overview of the legal implications of transport commission, see our complete freight forwarder's guide provides a summary of the key aspects.
The obligations of the principal
The principal also has a number of obligations.
Duty to inform
The principal must provide all the information required for the transport to run smoothly. Article 3.1 of the standard contract specifies that he must provide information on:
- The nature and purpose of the transport
- Specific terms of performance
- Addresses, dates and times of pick-up and delivery
- The names of the sender and recipient
- The number of packages, weight, dimensions and nature of the goods
- Potential danger
- Ancillary services requested
- Any specific instruction
This information must be provided in writing or electronically.
The principal shall bear the consequences of his failings, in particular those resulting from erroneous, incomplete or late declarations.
Delivery of goods
The principal must hand over the goods for collection, either to the commission agent or to a designated third party, at the agreed place and time.
The goods must be packaged and wrapped by the principal, unless the freight forwarder has been appointed to do so. Without an express mandate, the commission agent is not obliged to check the packaging, but must choose a form of transport that is suitable for the packaging.
The acceptance of the goods marks the beginning of the freight forwarder's liability. If the principal fails to hand over the goods at the agreed time, the contract may be terminated at the principal's expense.
Payment of the price
The principal must pay the agreed price. This price includes the commission agent's remuneration, reimbursement of expenses and transport costs.
According to article L. 1431-2 of the Transport Code and article 10 of the standard contract, the price reflects the cost of the various services. It includes:
- The cost of transport
- The cost of ancillary services
- Management fees
- The cost of the commission agent's intervention
Payment is due at the place of issue of the invoice, within a maximum period of thirty days from the date of issue.
Abusively low prices are punishable by a €90,000 fine.
To find out how these obligations relate to the services offered by our firm, visit our page transport law services.
Commissionaire's privilege
The commission agent benefits from a specific surety to guarantee payment of his claims.
Scope and limits of privilege
Article L. 132-2 of the French Commercial Code grants the commission agent a lien on the value of the goods and the documents relating to them.
This lien guarantees all claims against the principal, including those arising from previous transactions. It covers principal, interest, commission and costs.
The lien shall apply to the goods entrusted, even under reservation of title, if the commission agent is acting in good faith and was unaware of this reservation.
This lien confers a preferential right on the sale price and a right of retention enabling the goods to be held until full payment has been made.
Implementation of the privilege
To exercise his lien, the commission agent must hold claims that are certain, due and not seriously disputed.
A receivable is not due and payable if the goods have not been transported, the price has not been invoiced or substantial payment terms have been granted without security.
The lien may be exercised by selling the goods under civil enforcement procedures, or by judicial assignment.
The lien may be exercised on the goods or on the transport documents to prevent delivery.
A clear understanding of contractual obligations helps to establish secure commercial relationships. It provides a solid basis for resolving potential disputes.
For an analysis of your commission contracts or assistance in negotiating your general terms and conditions, our firm is at your disposal. Contact us for advice tailored to your situation.
Sources
- French Commercial Code, Articles L. 132-2 to L. 132-9
- Transport Code, articles L. 1431-2, L. 1432-7 to L. 1432-11
- Decree no. 2013-293 of 5 April 2013 approving the standard transport commission contract
- Court of Cassation case law on the contractual obligations of freight forwarders
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