Fixed or all inclusive Price - Criteria for Establishing Role
BIFA (2005) Section 5 B.
The offer and acceptance of an inclusive price for the accomplishment of any service or services shall not itself determine whether any such service is or services are to be arranged by the Company acting as Agent or to be provided by the Company acting as a Contracting Principal.
CIFFA Section 9 A)
The Company does not assume a role as principal by providing a fixed price quotation, or by rendering an invoice where the difference between the amounts payable to third parties retained to carry out the Customer's instructions and the fixed price represents the Company's gross profit for its services. A Customer agrees that the Company is an agent as provided in Section 1 where the Customer
(a)accepts a fixed price quotation, or
(b)does not within thirty days after receipt of the invoice object to the Company charging a fixed price for its services.
FIATA Model Rules Section 7.and Section 7.1.
The Freight Forwarder's liability as principal and The Freight Forwarder's liability as Carrier.
The Freight Forwarder is subject to liability as principal not only when he actually performs the carriage himself by his own means of transport (performing Carrier), but also if, by issuing his own transport document or otherwise, he has made an express or implied undertaking to assume Carrier liability (contracting Carrier). However, the Freight Forwarder shall not be deemed liable as Carrier if the Customer has received a transport document issued by a person other than the Freight Forwarder and does not within a reasonable time maintain that the Freight Forwarder is nevertheless liable as Carrier.
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Peter Jones' Commentary:
The distinction between principal and agent is perhaps the most important issue in forwarding law.
Clause 5 B and CIFFA Clause 9 are directed at a rule that an agent can charge a commission, but not charge a greater amount that it pays for services without consent. Of course, a party acting as a principal can charge whatever it can get its customer to pay. In theory an agent does not have the same freedom to charges its principal, because an agent should also be working to get the principal the lowest price possible.
This clause neutralizes the influence of a fixed price in determining the question of principal or agent. See the FIATA Legal Handbook on Forwarding Chapter 3, pages 22-24 for other factors that a court will consider.
As has been stated in the commentary on other conditions, the NSAB Conditions are the most precise in assigning carrier responsibility to a forwarder.
Under German law, where the freight forwarder steps in as carrier, carries out the freight forwarding at a fixed cost or organises the collection of cargo from different sources on the same vehicle, the new Act does not treat him as a "pure freight forwarder" but treats him more as a carrier or a consignor. This is because he is doing more than simply organising the carriage on behalf of someone else. See Commentary in "Reform of German Transport Law".