Ensure you are aware of the complexities around liability for goods in transit.

When transporting goods by road, rail, sea and air within New Zealand, the Contract and Commercial Law Act 2017 determines who is liable for damage occurring during a carriage of goods contract and what remedies are available. The only situation it doesn’t cover is the mail service.

Liability for goods starts when the goods are accepted by a carrier for carriage in accordance with a contract and ends once the goods are delivered to the receiver or the receiver has collected the goods.

Types of contract

A carrier’s liability under section 248 of the act depends on the type of contract you have with the carrier, and these include:

A contract for carriage at owner’s risk: the carrier is not liable for the loss or damage to any goods except where the carrier intentionally causes the loss or damage.

A contract at declared value risk: the carrier is liable for the loss or damage to any goods up to an amount specified in the contract.

A contract on declared terms: the carrier is liable for the loss or damage to the goods in accordance with a specific term of the contract.

A contract for limited carrier’s risk: the carrier is liable for the loss or damage to goods up to a certain amount.

What if there is no contract?

A contract for limited carrier’s risk is the default position if there is no contract between the parties. If it is a contract for limited carrier’s risk, this allows compensation for up to $2000 per ‘unit of goods’ if any damage or loss occurs. A ‘unit of goods’ is defined as an item of goods.

So, if you were transporting a large table from Whangarei to Christchurch but it had been dismantled into four separate parts, this is counted as four units. That means that the total amount of compensation that could be claimed for the table is no more than $8000. If each unit is worth considerably more than $2000, you need to ensure that your freight contract will entitle you to claim the actual value of the goods.

When do I need to make a claim?

Typically, you have 30 days after the date the carrier’s responsibility for the goods ended. However, it would be advisable to check the wording of your contract because it may specify a shorter period.

You must provide reasonable particulars of the alleged damage or loss when making a claim. Notice of a claim is not required if the carrier ought to be aware of the damage or loss or in the case of fraud by the carrier.

Do I need insurance?

You must clearly establish what kind of contract you have with the carrier from the outset to avoid arguments over liability or the amount of compensation involved.

You should also carefully consider arranging your own insurance policy because carriers are not liable for loss or damage that results from:

• an inherent defect in the products
• products not packed properly
• packing of dangerous goods
• seizure under a legal process, or
• when the carrier is saving or trying to save life or property.