The Problem
Parties cannot agree on responsibility for load at destination.
The Key Point
Mitigate damages now; assess responsibility later.
The Solution
“Handle for the account of whomever it concerns.”
Q: We are a transportation broker based in Arizona. We’ve run into a number of situations where produce wholesalers want to reject a load after alleging the truck arrived late or failed to maintain proper temperatures. In instances where the carrier is at fault, we often ask the wholesaler to agree to handle the product for the carrier’s account. But when we’re confident there’s no carrier fault, we’re reluctant to agree to anything that may disadvantage us or the carrier. Any recommendations?
A: When a wholesale receiver claims a breach by the carrier and rejects the load, it will often make sense for the carrier to encourage the receiver to sell the produce to mitigate potential losses, regardless of whether the carrier believes it is responsible for the problems with the load.
And carriers may justifiably be reluctant to allow the receiver to handle for the carrier’s account, when it is not clear that the carrier is at fault—for fear that such an agreement may be interpreted as an admission of fault. This situation can lead to an impasse that prevents produce from being sold promptly and for its full value.
One way to avoid this impasse is for parties to simply stipulate, “Receiver to handle for the account of whomever it may concern.”
Section (10.8) from our Transportation Guidelines reads as follows—
When a receiver alleges a breach by the Carrier and refuses to receive all or a portion of a shipment, it may make sense for the interested parties to agree to allow the receiver, for example, to sell the produce on consignment for the account of the party ultimately deemed responsible for the losses. Handling the product “for the account of whomever it may concern” may help the parties work together to mitigate losses with the understanding that any dispute as to responsibility for losses will be determined after the product is sold.
An agreement to allow the receiver to handle the product on this basis will not be construed as an admission of fault or responsibility by either party. Handling the product “for the account of whomever it may concern” allows the parties to get beyond an impasse at arrival with the expectation that any dispute as to responsibility for the load will be determined after the product is sold.
The Problem
Parties cannot agree on responsibility for load at destination.
The Key Point
Mitigate damages now; assess responsibility later.
The Solution
“Handle for the account of whomever it concerns.”
Q: We are a transportation broker based in Arizona. We’ve run into a number of situations where produce wholesalers want to reject a load after alleging the truck arrived late or failed to maintain proper temperatures. In instances where the carrier is at fault, we often ask the wholesaler to agree to handle the product for the carrier’s account. But when we’re confident there’s no carrier fault, we’re reluctant to agree to anything that may disadvantage us or the carrier. Any recommendations?
A: When a wholesale receiver claims a breach by the carrier and rejects the load, it will often make sense for the carrier to encourage the receiver to sell the produce to mitigate potential losses, regardless of whether the carrier believes it is responsible for the problems with the load.
And carriers may justifiably be reluctant to allow the receiver to handle for the carrier’s account, when it is not clear that the carrier is at fault—for fear that such an agreement may be interpreted as an admission of fault. This situation can lead to an impasse that prevents produce from being sold promptly and for its full value.
One way to avoid this impasse is for parties to simply stipulate, “Receiver to handle for the account of whomever it may concern.”
Section (10.8) from our Transportation Guidelines reads as follows—
When a receiver alleges a breach by the Carrier and refuses to receive all or a portion of a shipment, it may make sense for the interested parties to agree to allow the receiver, for example, to sell the produce on consignment for the account of the party ultimately deemed responsible for the losses. Handling the product “for the account of whomever it may concern” may help the parties work together to mitigate losses with the understanding that any dispute as to responsibility for losses will be determined after the product is sold.
An agreement to allow the receiver to handle the product on this basis will not be construed as an admission of fault or responsibility by either party. Handling the product “for the account of whomever it may concern” allows the parties to get beyond an impasse at arrival with the expectation that any dispute as to responsibility for the load will be determined after the product is sold.
