Carrier’s Period of Liability
The carrier is liable under the CMR, for loss and damage arising between the time it assumes control of the goods and the time that it delivers them. The position is determined in accordance with the contract and the Convention.
Where loss and damage occur to goods while the carrier is responsible for them, it is presumed that there has been a breach of contract. If the claimant proves a difference between the apparent condition of the goods on taking over and on delivery, the court may infer that the loss or damage was suffered between the time the defendant took control of the goods and the time it delivered them.
The Convention applies provided that the carrier has taken over the goods. “Taking over the goods”, requires that the carrier has taken control and custody of them from the seller or another, for the purpose of the contract of carriage. Accordingly, the mere leaving of the goods at the carrier’s premises without its knowledge, would not suffice. There must be a conscious assumption of custody and control.
It appears that control must be for the purpose of the intended transportation, rather than for some other purpose. The broader view is that the giving of the goods into the custody of the carrier is sufficient. Therefore, where the goods are placed for some other purpose, such as packaging and warehousing, this is a sufficient “taking over”. Taking over may require loading and physical delivery, in which case control passes at the time of physical delivery and loading.
Taking over may be governed by the underlying contract. Loading may be the responsibility of the consignor or carrier.
Carrier’s Duties and Rights I
The carrier’s duty is higher than that of ordinary reasonable care but less than a strict or absolute duty. There is a defence based on unavoidable circumstances. There are rules in respect of special risks, which may affect the duty. The carrier may have more extensive duties under the terms of the contract or under domestic legislation
The carrier may generally select the vehicle. The consigner will usually rely on the skill of the carrier in making the selection. Alternatively, the matter may be agreed by the parties, or there may be no specific reliance by the consigner. The contract might express or imply that a particular vehicle be used. This may be relevant where the goods require particular ambient conditions.
If the goods are presented packed in a particular way, the carrier must select the appropriate mode of transport, or if it cannot do so, to refuse to carry the goods. Issues of contributory liability may arise if goods are not appropriately packed and the consignor allows them to be transported in an unsuitable vehicle.
The carrier may be expressly or impliedly permitted to subcontract. Where the consigner relies on the particular personal skill and standing of the carrier, subcontracting may not be permissible.
Carrier’s Duties and Rights II
The carrier must take reasonable care to provide a vehicle which is suitable for carriage. There is an implied warranty that the vehicle is roadworthy. Trade custom may be relevant. It may be necessary and customary to transport particular types of goods in particular types of vehicles.
The carrier must provide a competent and trustworthy driver. He should be competent to deal with problems that arise at distance, during carriage.
Transhipment from one road vehicle to another is permitted unless expressly prohibited by the terms of the contract. Transfer to a non-road vehicle is not generally permitted unless it is specifically contemplated or is allowed under the CMR (A.14). Transhipment may be necessary if it is not possible to get instructions within a reasonable time, or if it is in the best interest of the owners of the goods.
Route, Deviation and Speed
Generally, the carrier may choose the route, unless a specific route has been specified. The route may be expressly or provided. There is commonly a usual route, which is generally the shortest or quickest route.
In the context of the shipping of goods, a deviation can have serious consequences and can deprive the carrier of defences under the equivalent Convention. Where the deviation occurs during the maritime phase, this regime may apply. The same strict principles do not apply to the carriage of goods by road. However, the CMR does have its own sanctions for serious misconduct, which do affect the carrier’s defences.
There are obligations to deliver the goods with reasonable dispatch. The common law applies to the period prior to the carrier taking control and custody of the goods. It will commonly imply an obligation to collect with due expedition. Once the goods have been entrusted to the carrier, the common law implies, based on the presumed intention of the parties, that the goods are to be delivered with reasonable dispatch.
Delivery of the Goods
The CMR applies after the goods have been entrusted to the carrier. It provides for the delivery date. Generally, if the carrier complies with its obligation to deliver by the due date, no breach of contract will arise, even if carriage has not been undertaken with due expedition. Accordingly, under the CMR, there is unlikely to be an implied term which requires an increase in the speed of dispatch, above that required by the due delivery date
The CMR contemplates delivery of the goods to a specified person at a specified place. The CMR gives the consignor the right to dispose of the goods until the second consignment note has been given by the carrier to the consignee or the goods have arrived and the consignor has required that the goods are delivered to it.
Either the consignor or consignee may vary the place of delivery of the goods and the person to whom they are delivered. The consignor may specify a new consignee or destination. It must be possible to carry out the instructions when they reach the person, who is to carry them out. The carrier must be indemnified against loss or damages arising from a changed instruction. This may include loss of profits.
Consignment Note and Variation of Consignee
The person who exercises the right of disposal must produce the consignment note given to the consignor / sender. The consignment notes, however, is not a negotiable instrument. It does constitute evidence as to who is entitled to the goods, but other evidence may be offered. The right to nominate a changed consignment location terminates if the carrier has delivered the second copy of the consignment note to the consignee.
The right to nominate a new consignee or location cannot be exercised if it interferes with the normal working of the carrier’s undertaking or prejudices other consignors or consignees. For example, it may cause delay or be economically inefficient.
The instruction may not require the division of the consignment. If the consignment involves a number of distinct elements so that it is already deliverable in different parts, it is arguable that the right of disposal may be exercised in respect of each. Generally, the right of the consignor is lost if the right of disposal of the goods passes to the consignee.
The carrier is liable if it has not carried out the instructions under the conditions provided for or has carried them out without requiring the production of the first consignment note. He is liable to the person who is entitled to make a claim for loss and damage thereby incurred.
If the delivery proves more expensive or if conditions are more difficult than anticipated, the risk is generally borne by the carrier. If it becomes impossible to perform, the contract may be discharged, except where one or other party takes the risk in respect of the matter concerned under the contract.
Repudiation / Fundamental Breach
In the event of repudiation or fundamental breach of a contract at common law, the innocent party may terminate the contract. More precisely, he may terminate his obligations while leaving his own secondary rights to compensation, arbitration etc. intact. The termination is not retroactive. The innocent party is relieved of his own obligations which have not yet fallen due.
The party who has repudiated or causes a series breach is subject to a secondary obligation to pay compensation. If the carrier refuses to take the goods, the sender is generally entitled to terminate the contract and employ another carrier who is going to perform but is late. In some cases, late performance may be a fundamental breach.
The time limits and times for performance in commercial contracts may or may not be fundamental duties and obligations. In some contexts, the term may be critical while in others it may be less, or not be so. A party who has a right to terminate is not necessarily obliged to do so. He may elect not to do so and seek damages for breach, if applicable.
Failure to Pay
The carrier may sue in debt for the costs and carriage charges. He must have completed the carriage and delivered the goods or at least been ready, willing and able to deliver them. Unless the contract provides otherwise, the carrier is not entitled to charge pro rata.
A carrier, who has not been paid, may be in a position to repudiate, if the payment date is “time of the essence” or has been made so, after reasonable notice and failure to pay within the further reasonable time. He may accept late payment. He may be entitled to statutory or contractual interest.
Even if the consignor declares that he will not pay, the carrier may still perform and claim the sum due as a debt, provided that he has a legitimate interest in so doing. It may be to his advantage to do so. He may have a legitimate interest where he acquires rights by way of a lien over the goods. This of itself may justify his actions in effectively becoming a secured creditor.
Security / Lien
If a consignee requires delivery, he must pay the charges shown to be due on the consignment note. In the event of a dispute on the matter, the carrier is not required to deliver the goods until security has been furnished.
At common-law, the carrier has a lien for freight and carriage on the goods which he has tendered for delivery or brought to the destination. The lien subsists for so long as goods are retained and possessed. There is no general lien on goods in respect of debts due under previous contracts. The carrier does not have a right to resell goods unless the right is given by the contract of carriage.
If the consignee repudiates before the carrier has completed delivery, the carrier may have an interest in completing the carriage, if this is the condition of the lien.
Impossibility of Performance
The CMR makes provision for matters that render performance in the manner contemplated impossible. If it becomes impossible to carry out the contract in accordance with the terms of the consignment note, the carrier must request instructions from the person with the right of disposal. Instructions must be requested within a reasonable time and sufficient information to allow a reply to be received. The instruction must be reasonable. What is reasonable depends on the circumstances.
Literal impossibility is not required. Impossibility without steps that are unreasonable suffices. Impossibility relates to the performance of the contract in accordance with its terms. Accordingly, an impossibility in this sense is relative in its terms.
The carrier is excused if the loss, damage or delay is unavoidable. The test of impossibility is objective. The carrier may be expected to remediate most problems that arise, that make the performance more difficult.
In cases of impossibility or prevention of delivery, the carrier may immediately unload the goods for the account of the person entitled to dispose of them. The carriage is thereby ended. It may be done without instructions. If the carrier undertakes the unloading, the cost must be met by the person who is entitled to dispose of the goods.
Unloading may constitute delivery for the purposes of the Convention. The carrier holds the goods on behalf of the person entitled to dispose of them. It may incur liability for breach of implied duties as such.
Prevention and Alternative Delivery
If circumstances prevent the delivery of the goods after their arrival at the designated place, the carrier must seek instructions from the consignor. Prevention is a similar concept to impossibility in this context. It is relative to the terms of the contract. Prevention may be due to the non-acceptance of the goods by the consignee. If the consignee refuses the goods, the consignor is entitled to dispose of them without being obliged to produce the first copy of the consignment note.
If the prevention is due to some other cause, the consignor, subject to producing the first consignment note may give instructions. The carrier is obliged to seek instructions from the consignor. He may have powers to deal with the goods, including a power of sale where necessary.
If he is unable to obtain instructions within a reasonable time, he must take steps as seem to him to be in the best interests of the person entitled to dispose of the goods. In this case, he acts as an agent of necessity for that person. The steps may include unloading, thereby ending the contract of carriage. It may include contracting with a third party for further carriage.
Frustration / Impossibility
If the carrier cannot complete performance as a result of unavoidable circumstances, he is relieved of liability under CMR. This equates to the common-law principle of frustration.
CMR deals with circumstances which prevent delivery after their arrival at the place designated for delivery. It also deals with cases where it becomes impossible to carry out the contract in accordance with terms set out in the consignment note before the goods reach the place designated for delivery.
Impossibility effectively terminates the contract automatically. The carrier is no longer obliged to carry them, and the consignor is not obliged to load them.
Lost Goods Found
After a certain delay, the person entitled to make a claim may treat the goods as lost. The rule is designed to remove uncertainty. The consignee may on receipt of compensation for the missing goods, request in writing that he should be notified immediately, should the goods be recovered in the course of the year following payment of compensation. He shall be given a written acknowledgement of the request.
If the carrier does not give notification that the goods have been found, the matter is covered by national law and is likely to be treated as a breach of contract depending on the law of the place concerned. The claimant may be able to bring an action for conversion.
Within 30 days following receipt of the notification, the person entitled may require the goods to be delivered to him against payment of charges shown to be due on the consignment note and against a refund of compensation he received less any charges included therein but without prejudice to any claims for compensation for delay in delivering.
In the absence of the above request or instructions given within a period of 30 days, or if the goods are not recovered until more than one year after payment of compensation, the carrier is entitled to deal with them in accordance with the law of the place where they are situated.
References and Sources
Convention and Legislation
Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 19th day of May, 1956
Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 5th day of July, 1978
Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 27th of May 2008
International Carriage of Goods by Road Act, 1990.
International Carriage of Goods by Road: CMR 6th Edition 2014 Malcolm Clarke
C.M.R. : Contracts for the International Carriage of Goods by Road 3rd Ed 2014 Donald James Hill
The Law of Transport and Road Haulage (1999) J. Canny (Author)