Freight Forwarder Contract under Turkish Law

September 2020 Duygu Öner Ayçiçek
% 0

Introduction

Parallel to technological developments, the rapid development of production and trade life inevitably increased the need for transportation activities and caused the emergence of new actors in this field. A freight forwarder is one of the indispensable actors of carriage that emerges within the framework of this need. 

The product being the subject of commercial activity also requires its displacement. In this respect, in addition to the actual displacement of the goods, it may be necessary to carry out operations related to carriage, such as storage under appropriate conditions, customs clearance, loading on to the transport vehicle, stowage, etc. Since the manufacturer / seller of the product subject to sale usually does not have the knowledge and experience in performing the said operations, it consults with parties who have expertise in this field in order to transport the product as soon as possible, with the least cost, and to perform other operations related to transportation. This person, whose expertise is consulted, is usually not the person who will undertake the carriage personally, but the freight forwarder who organizes the carriage and the processes related to carriage.

Liabilities of the Freight Forwarder within the Framework of the Concept of Carriage

The provisions regarding the freight forwarder are regulated between Articles 917 and 930 of Turkish Commercial Code numbered 6102 (“TCC”). Pursuant to Article 917 of the TCC, under the freight forwarding contract, the forwarder undertakes to have goods carried at an agreed fee. The party on the other side of the contract, and referred to as the "consignor" in the TCC, is defined as the person who appoints the forwarder for the purpose of having the goods carried, and undertakes to pay the fee agreed upon in the contract.

Under the freight forwarding contract, the forwarder undertakes to have goods carried, not to carry them, personally. What should be understood from the expression, "have the goods carried," is the organization of the carriage. In this context, the forwarder is obliged to determine the transport modes and transportation route, to appoint the carrier or carriers to perform the actual carriage, to make the required contracts of carriage, warehouse, and freight forwarding, to give required information and instructions to the carrier or carriers, and to secure the rights of the consignor as to compensation.

Furthermore, fulfillment of performances like insurance, packaging, marking and clearance of the goods agreed upon for carriage, are within the scope of the obligations of the freight forwarder. Under the freight forwarding contract, unless otherwise provided, the freight forwarder is obliged to make required agreements for the fulfillment of these performances.

Pursuant to Article 918 of the TCC, the freight forwarder makes required agreements in his own name. In this context, it is accepted that an indirect representation relationship has been established between the consignor and the forwarder. If authorized by the consignor, it makes the relevant agreements on behalf of the consignor. In this case, the freight forwarder will directly represent the consignor. It is significant in terms of who will be deemed liable to the carrier under the carriage contract and on behalf of whom (forwarder or consignor) the contract of carriage is to be made between the forwarder and the carrier.

The freight forwarder is obliged to protect the benefits of the consignor and obey the instructions of consignor while carrying out its duties.

Undertaking the Carriage of Goods by the Forwarder

The freight forwarder may undertake to perform the carriage of the goods. If it uses this right, the forwarder is considered as the carrier in terms of the rights and obligations arising from the carriage. In this case, in addition to the fee to be requested for its activity, the forwarder may demand its ordinary carriage fee.

In a similar way, if an amount, including the transport expenses, is determined as a lump sum, the freight forwarder acquires the rights and obligations of the carrier concerning carriage. The fee may be separately determined with respect to the forwarding, or it may be decided as a lump sum price that includes the carriage fee.

Forwarder’s Right to Lien

Pursuant to Article 923 of the TCC, the freight forwarder has right to place a lien on the goods for all kinds of receivables arising from the freight forwarding contract. The right to place a lien may be defined as a right in rem, which gives the creditor the right to refrain from returning a property belonging to the debtor, and to convert the receivable into monies for collection, in the presence of certain conditions.

Debts of the Consignor under the Freight Forwarding Contract

Under the freight forwarding contract, the main debt of the consignor is to pay the agreed upon fee in the contract. The freight forwarder is also entitled to charge the expenses. The expenses arise as a result of the activities carried out by the freight forwarder for the carriage of goods specified in the freight forwarding contract, and also covers additional charges, such as carriage, warehouse and clearance of goods, as well as insurance expenses.[1] As well, the consignor is obliged to perform packaging, mark the goods, provide the required documents, and give the required information to the freight forwarder for the forwarder to fulfill its performances, if required. Another obligation of the consignor is to compensate the freight forwarder for any damages due to non-performance of the contract.[2]

Liability of Freight Forwarder

The freight forwarder is liable for the damage or loss of the goods in its possession. In order for the forwarder to be held liable for these damages, the event that causes the damage must occur while the property is in the possession of the forwarder. Even if the damage occurs later, if the event that causes the damage occurred while the property was in the possession of the forwarder, the freight forwarder is, again, liable for the damages.[3] If damage or loss of the goods occurs while in possession of the carrier, the forwarder should not be held liable. The freight forwarder is liable for losses not arising from the loss and damage of the goods in its possession, only if it breaches one of its obligations pursuant to Article 918. If loss cannot be prevented despite the due attention of the prudent merchant, the freight forwarder is released from liability. If loss is caused by an act of the consignor, or a special defect of goods, it is taken into consideration to what extent these facts are effective in the realization of the obligation of indemnity and determination of its scope.

Conclusion

Since the freight forwarder, who organizes the carriage and the processes related to carriage, is a commercial actor frequently consulted in both the national and international transportation field, the rights and obligations of the parties with the freight forwarding contract are specifically regulated in the TCC. With the relevant provisions, the rights and obligations of the forwarder are regulated independently from the carrier, and the rules that must be applied to the relationship between the consignor and the forwarder have, thus, been clarified.

[1] Akdeniz, Umut: Taşıma İşleri Komisyonculuğu Sözleşmesi, Adalet Yayınevi, Ankara 2013, 1st ed., p. 93.

[2] Akdeniz, p. 100.

[3] Akdeniz, p. 109.

All rights of this article are reserved. This article may not be used, reproduced, copied, published, distributed, or otherwise disseminated without quotation or Erdem & Erdem Law Firm's written consent. Any content created without citing the resource or Erdem & Erdem Law Firm’s written consent is regularly tracked, and legal action will be taken in case of violation.

Other Contents

Newsletter Articles
Carriage of Goods by Road under the Turkish Commercial Code

Turkey ratified the Convention on the Contract for International Carriage of Goods by Road (“CMR”) in accordance with Act No. 3939 dated 7 December 1993, and the CMR entered into force in Turkey on 31 October 1995. In accordance with Article 1 / 1 of the CMR, the carriage of goods by road...

Commercial Law August 2017
Newsletter Articles
Ordinary Partnerships

Ordinary partnerships are governed by Article 620 et seq. of the Turkish Code of Obligations No. 6098 (“TCO”). An ordinary partnership agreement is defined as an agreement whereby two or more persons undertake to join efforts and/or goods to reach a common goal...

Commercial Law April 2014
Newsletter Articles
Nationality Of Legal Entities
Commercial Law October 2012
Newsletter Articles
Board Members’ Financial Rights in the Context of Disguised Profit Transfers

The concept of disguised profit transfer in joint stock companies, in its broadest meaning, covers the transfer of company assets to related parties and may occur in different ways. This concept is regulated in detail under capital markets legislation...

Commercial Law February 2022
Newsletter Articles
Newsletter Articles
Newsletter Articles
General Assembly Summons Lawsuits
Commercial Law August 2021
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Actual Carrier in Carriage of Goods by Sea
Commercial Law February 2021
Newsletter Articles
Newsletter Articles
Newsletter Articles
Veto Rights in Joint Stock Companies
Commercial Law August 2020
Newsletter Articles
Newsletter Articles
Ship Hypothéque under Turkish Law
Commercial Law May 2020
Newsletter Articles
Newsletter Articles
Newsletter Articles
Legal Liability of Limited Company Managers
Commercial Law January 2020
Newsletter Articles
Employer’s Remedies under FIDIC Silver Book
Commercial Law October 2019
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Transfer of Seized Shares
Commercial Law July 2019
Newsletter Articles
Newsletter Articles
Newsletter Articles
Corporatization of Football Clubs
Commercial Law April 2019
Newsletter Articles
Newsletter Articles
2016 York Antwerp Rules
Commercial Law March 2019
Newsletter Articles
Newsletter Articles
Amendments on Capital Loss and Insolvency
Commercial Law September 2018
Newsletter Articles
Foreign Currency Payment Ban
Commercial Law September 2018
Newsletter Articles
Newsletter Articles
Installment Sales Agreements
Commercial Law July 2018
Newsletter Articles
Newsletter Articles
Newsletter Articles
Arrest of Ships under Turkish Law
Commercial Law May 2018
Newsletter Articles
Share Pledges in Joint Stock Companies
Commercial Law May 2018
Newsletter Articles
Newsletter Articles
Updated FIDIC Contracts
Commercial Law April 2018
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Features of Joint Venture Contract
Commercial Law October 2017
Newsletter Articles
Newsletter Articles
Stock Option Plans in Turkey
Commercial Law June 2017
Newsletter Articles
Voting Agreements under Turkish Law
Commercial Law May 2017
Newsletter Articles
Newsletter Articles
Pre-emptive Right in Joint Stock Companies
Commercial Law April 2017
Newsletter Articles
Holding Company Structure under Turkish Law
Commercial Law January 2017
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Loss Of Capital in Joint Stock Companies
Commercial Law September 2015
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Non-Compete Obligation Of The Commercial Agent
Commercial Law December 2014
Newsletter Articles
Right To Request Special Audit
Commercial Law October 2014
Newsletter Articles
Special Committee Of Preference Shareholders
Commercial Law October 2014
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Conditional Capital Increase
Commercial Law March 2014
Newsletter Articles
Newsletter Articles
General Communiqué On Electronic Books
Commercial Law December 2013
Newsletter Articles
Domination Agreements
Commercial Law January 2014
Newsletter Articles
Newsletter Articles
Representation in Joint Stock Companies
Commercial Law December 2013
Newsletter Articles
Squeeze-Out in Group Companies
Commercial Law November 2013
Newsletter Articles
Shareholder Agreements
Commercial Law November 2013
Newsletter Articles
The Regulation On Private Health Insurance
Commercial Law October 2013
Newsletter Articles
Newsletter Articles
Newsletter Articles
Freedom of Settlement of Foreign Companies
Commercial Law September 2013
Newsletter Articles
Branches And Liaison Offices
Commercial Law August 2013
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Conversion of the Commercial Enterprise
Commercial Law April 2013
Newsletter Articles
Newsletter Articles
Trade Registry Regulation
Commercial Law January 2013
Newsletter Articles
Newsletter Articles
Financial Leasing Agreements
Commercial Law December 2012
Newsletter Articles
Newsletter Articles
Newsletter Articles
Advance Dividend
Commercial Law September 2012
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles
Newsletter Articles

For creative legal solutions, please contact us.