Did you know about a major change in contracts for carriage?

A quiet amendment to the Road Transport Act has been in force since 1 January 2019. The change means that part of the Convention on the Contract for the International Carriage of Goods by Road (CMR) (“CMR”) will directly affect national contracts for carriage of goods executed after 1 January 2019.

While everyone in international transport certainly knows the CMR principles, their application may come as a big surprise for national carriers or senders (and for the latter not always a pleasant one).

Unlike the existing national road transport legislation in the Czech Republic, the CMR strictly protects carriers in the following ways (among others):

  • by significantly restricting the liability of the carrier and the extent of its liability for damages to the consignment or delays in delivery (except in cases of intentional behaviour of the carrier or its employee);
  • by providing for cases of total exemption from liability for damages caused by the carrier; in certain cases, the carrier is not liable for damage at all;
  • by applying a number of relatively short preclusive deadlines for claims against the carrier; in the event of their lapse, the right to raise claims ceases;
  • by imposing many obligations on the sender, which if not met will result in its liability for any damages and expenses incurred by the carrier, such as defective packaging, even if agreed otherwise with the carrier.

While under the Civil Code the carrier was responsible for the loss or destruction of the consignment generally up to the amount of its value, the CMR by default limits the liability only up to approximately CZK 260 per kg of the consignment, depending on the current SDR/CZK exchange rate.

Under the terms of the CMR, the parties may agree on higher levels of compensation, but only for an additional surcharge. If the parties do not agree, there is no choice but to use cargo insurance.

The CMR contract on carriage is confirmed by a consignment note with strict content requirements, which the sender is responsible to complete. If the consignment note contains irregularities, the sender will be liable to the carrier for any damage and expenses incurred as a result of the incompleteness or inaccuracy of the consignment note. However, even the complete (deliberate) absence of the consignment note does not exclude application of the CMR.

We recommend carrying out a diligent review of the particular terms of contracts with the carriers, especially for higher value consignments or where you are especially interested in timely delivery. As the application of sanctions and procedures not anticipated by the CMR is legally controversial, we assume that many existing contracts include, for example, invalid contractual penalties. Besides the difficulty of enforcing such provisions in the event of a dispute, it is also a risk for the sender, as the carrier itself may claim compensation for damages or the return of any unjustified enrichment from the sender.

For more information, please contact Michal Zahradník, Veronika Chrobok or your contact person in our office.

This article is for informational purposes only and does not constitute legal advice on any of the topics covered.