Q&A: Carrier Is Liable, Contractually

Q: We had an unusual situation arise when our shipping dock unfortunately misdirected a small load. The shipment was given to a motor carrier with a bill of lading identifying the wrong consignee. When the load arrived, the consignee of course refused to accept it (among other things, the labeling identified the correct consignee).

This was admittedly our fault, so we negotiated with the carrier for a price to return the load to us. It said it would do the return for the same money as the outbound, and confirmed that in writing. But the carrier wanted to wait to combine it with another shipment, and gave us a delivery date a few days later.

The shipment never showed up. When we called, the carrier told us it couldn’t find another shipment, and that accordingly the price would be double. We said no, we’d pay only the agreed-upon price.

For the next few days, we weren’t able to get in touch with the carrier. When we finally did, the carrier told us it didn’t have the shipment any more, that it had been “donated.”

So we have a claim. Someone told me the carrier at that point was acting as a warehouseman, and therefore liable only for its own negligence, but even so, can it lawfully give away our product without our consent?

 

A: There’s an apocryphal story that sort of fits here: A man walks up to a woman in a bar and asks if she’ll go to bed with him for $50,000. “Gee, $50,000?” she says wonderingly. “Yeah, I guess so.”

“Well, would you go to bed with me for $50?” he asks.

“What!” she exclaims. “What do you think I am?”

“We’ve already determined that,” he tells her calmly. “We’re just dickering about your price.”

This carrier already had agreed to haul your misdirected load back to you, and contracted for a price to do so. Now it was just dickering to up the ante. That doesn’t somehow magically transform it into a warehouseman; it’s still a carrier with custody of the shipment, full and complete shipping instructions, and the same no-fault liability of a carrier that it had on the outbound move.

And all that’s pretty irrelevant anyway. Whether it’s a carrier, a warehouseman or some anonymous guy on the street, it has no right to abandon property it knows to be yours out of mere pique. What it did amounts to something called “conversion.”

“Conversion” is legal shorthand for converting someone else’s goods to one’s own use, which is illegal. You can’t treat another person’s property as if it were your own, to be disposed of at your whim; this violates even the duty of “slight care” that goes with the least level of a “bailment” (which is when you have physical possession of someone else’s stuff).

And a carrier’s duty under the law of bailments goes vastly beyond that level. (So, for that matter, does a warehouseman’s; it’s less, but nothing like that much less.) Accordingly, it’s liable for the full value of your shipment; and because I doubt mightily that its cargo insurer will pay in the circumstances, it’s on the hook itself.

Was the carrier within its legal rights to renege on its price offer and try to hit you up for double the amount? I don’t think so, especially because it confirmed its offer in writing. The law deems an offer of this nature a unilateral contract, but your acceptance of the offer immediately transforms it into a bilateral one, which the carrier is obliged to honor.

Now, had the carrier made the offer contingent — “provided we can find a co-load” — that might be another matter. But you phoned in your question, I asked you about this, and you said there was no such contingency. This part of the agreement was only oral, and was presented to you as a matter of the carrier’s convenience in delaying the return rather than as a condition of the agreed return price.

So I consider that the agreement stood, and your rejection of its revised price didn’t relieve the carrier of its obligation to honor the original quote. Still more, by no stretch of the imagination could your rejection of the higher price be construed as your abandonment of the shipment and consequently authorization for the carrier to dispose of it as it chose.

The carrier may be lying to you and still have the load. But one way or another, it owes you that load or economic recompense. 

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

 

 

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