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The way you do business could easily be breaking the law

December 20, 2018


One of the objects of Chain of Responsibility (CoR) is to put road safety in the context of the entire supply chain. As a result, when looking at a contract for the sale of goods, the ultimate transport of the goods should always be a major consideration.

For this reason, the CoR laws impose duties on parties to ensure that their terms of consignment do not cause or encourage others in the Chain to breach the CoR laws and also that transport documentation is accurate and not misleading in any material respect.

What are ‘terms of consignment’?

The phrase ‘terms of consignment’ is not defined in the Heavy Vehicle National Law (HVNL).

It is, and it is intended to be, extremely broad. Potentially, it includes written and oral terms and instructions, as well as implied terms.

Terms of consignment are likely to include any contractual or documentary arrangement that affects goods consigned by road and how they are consigned by road. Consignment is an extremely broad concept describing any circumstances by which goods are consigned for movement, or delivery from one place to another.

What is ‘transport documentation’?

The phrase ‘transport documentation’ is defined in the HVNL, which gives the following examples of traditional contracts such as:

  • Bills of lading
  • Consignment notes
  • Contracts of carriage
  • Delivery orders
  • Vendor declarations.

3 contracts covering movement of goods

A movement of goods by road may be subject to several contracts including:

  1. A contract of carriage by road.

This may be an individual contract for a particular movement of goods, or part of a longer term contractual arrangement involving many movements of goods. It may be subject to one or more subcontracts between a prime contractor and a driver/operator.

  1. A contract for sale of the goods.

This type of contract may require that the seller or the buyer procure the delivery of the goods. Again, there may be several contracts that relate to the sale of the same goods so only the first and last buyer/seller will actually have to arrange the carriage.

  1. A storage and handling agreement.

Under this agreement, the party responsible for storage is also responsible for arranging delivery.

While journey documentation relates to physical paperwork, terms of consignment relates to the substance and effect of any arrangements. These could be terms and conditions contained in journey documentation as well as any additional agreement or understanding between the parties.

One example of terms of consignment which could have a direct impact on CoR breaches is ‘delivery times’. So, the relevant terms of consignment could include loading and delivery times, the opening hours of a warehouse or distribution centre and the practices of the relevant parties in tolerating and/or responding to delays.

It is important to note that a party may be guilty of an offence and subject to a substantial penalty under the HVNL if the terms of consignment cause or encourage speeding or fatigue.

Terms of consignment with respect to CoR Compliance

All terms relating to carriage and consignment are likely to be considered terms of consignment whether they appear in:

  • contracts for the sale of goods
  • transport contracts; or
  • written or oral instructions to drivers, or loading managers or consignors.

In contracts for the sale of goods, the logistics should not be an afterthought.

If the extent of the terms of consignment is to simply arrange freight by a phone call to an operator with the instruction to “collect the goods from A and deliver them to B”, are they sufficient to ensure that they don’t encourage or reward speeding or fatigued driving’?

In CoR compliance, you have to take care about the effect of your arrangements.

It is not enough to make sure your contracts contain warranties that the parties will comply with CoR obligations if the actual terms of consignment could be seen to encourage or result in speeding and fatigue.

All terms of consignment should be in writing with appropriate reference to terms and conditions that are CoR compliant.

Are you on top of all of your CoR obligations?

If you’re not 100% sure, now is the time to subscribe to CoR Adviser.

Written by the transport lawyers at Holding Redlich, CoR Adviser is a monthly newsletter and online resource that helps you keep ahead of your CoR obligations.

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