Freight Forwarding Agreement
A Freight Forwarding Agreement is a contract between a shipper (often an exporter or importer) and a freight forwarder, who is responsible for arranging the transportation, logistics, and sometimes customs clearance of goods from one location to another - domestically or internationally. It is important because it clearly defines the roles, responsibilities, liabilities, and payment terms related to the handling, storage, and shipment of goods. This helps minimise disputes, ensures legal compliance (especially for international trade), and allocates risk appropriately between parties involved in the supply chain.
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Freight Forwarding Agreement - A Contract for Shipping and Logistics
A Freight Forwarding Agreement is a legal contract between a shipper (the client) and a freight forwarder. This agreement is crucial because it clearly defines the roles, responsibilities, and liabilities related to the handling, storage, and shipment of goods. It is an essential tool for managing a supply chain, as it helps to minimize disputes, ensures legal compliance, and appropriately allocates risk between the parties involved.
Scope of Services and Obligations
This section outlines the services the freight forwarder will provide, such as arranging transportation, managing logistics, and handling customs clearance. It also details the obligations of the client, including providing accurate information and ensuring goods are properly packaged for transport.
Fees and Payment Terms
The agreement specifies the total fees for the freight forwarding services, which are often detailed in a separate quotation or invoice. It also outlines the payment schedule, such as an initial deposit and a final payment. This provides financial clarity for both the freight forwarder and the client.
Insurance and Liability
This is a critical section that clarifies who is responsible for insurance. The agreement states that the freight forwarder is not liable for loss or damage to the goods unless it's a result of their proven negligence. It also specifies that the client is responsible for purchasing cargo insurance and that the freight forwarder's liability is limited to a fixed amount per unit or pallet.
Term and Termination
This section sets the duration of the agreement and the conditions under which it can be terminated early. It also specifies that in the event of termination, the client is responsible for paying for all fees and charges incurred by the freight forwarder up to the termination date.
Governing Law & Jurisdiction
This is a crucial section for any international agreement. It specifies which country's laws will govern the contract and which courts will have exclusive jurisdiction over any disputes. This provides a clear legal framework and a predictable path for conflict resolution.
Creating a Freight Forwarding Agreement with Bind is the easiest way to manage your logistics and supply chain. Our tool guides you to create a comprehensive and legally sound document that protects your business. Once the agreement is ready, you can sign it electronically, making the entire process fast and secure.
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