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We think referring to your customer’s responsibility for paying for the freight following a breach may be confusing the issue somewhat. If your customer can show a breach and resulting damages, then your customer, as the aggrieved party, is entitled to be made whole by the breaching party. For example, if your customer was supposed to receive product worth $20,000, but due to a carrier breach receives product worth only $15,000, then to be made whole your customer may deduct $5,000 (plus inspection fees) from your freight invoice. If your freight invoice was for $7,000, your customer owes you $2,000.
So, the amount paid to you as the truck broker “for freight,” really depends on the amount of your customer’s damages and the price agreed upon when the shipment was booked. If your customer’s damages exceed the cost of the freight, then this difference is payable to your customer. Again, the idea is to make the aggrieved party whole.
The same concept applies even when no delivery occurs. A receiver that properly rejects a shipment with a destination market value of $20,000 is damaged $20,000, but must apply this amount against the agreed upon cost of the freight—which it would have had to pay had there been no breach—to avoid an improper windfall and arrive at the amount due.
Your questions? Yes, send them in. Legal answers? No, industry knowledgeable answers. If you have questions or would like further information, email tradingassist@bluebookservices.com.
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