In the beginning, ships were the source of transport and sale of goods in various parts of the world. Shipowners sailed from port to port on their ships to sell and buy more goods when they reached their next destination. In the 19th and 20th centuries, ports were significantly developed, which led to the birth of liner shipping, which offered various daily services in ports for cargo and ships that carried this cargo to different ports. Due to the development of new and larger markets, shipowners have begun to appoint independent agents for ports in various jurisdictions to improve the efficiency of ship operations. Typically, almost all agreements have an arbitration clause, as it is the cheapest and fastest way to resolve disputes. This is an extremely important clause that describes all the tasks that the agent must assume after the conclusion of the contract. Some of the obligations enshrined in almost all agreements are to follow all the instructions of the client, to exercise diligence and prudence in the performance of tasks, to obtain all necessary permits and licenses, not to delegate obligations to third parties, etc. We are able to represent your line in the different countries of our network through a local, regional or global contractual structure. Our offer can be adapted to your individual needs, including but not limited to: The biggest difficulty in carrying out the study was to obtain the examples of agreements, as they are essential and confidential documents. In addition, more agents who were contacted to express their opinions on the subject of agency contracts refused to give leaked interviews or complete questionnaires for fear that 6 could jeopardize existing relationships with their clients. It is also worth mentioning that little attention has been paid to the subject of agency contracts in published books.
Therefore, much of the research was done using journals and internet sources as reference material. A principal is a company or person who owns or manages the vessel represented by the agent, and the agent is the person who assists the principal in establishing a relationship with third parties. He acts on behalf of the client and performs all the functions specified in the hierarchical agency contract. The agreement begins with the definition of the client and the agent. In addition, the contractor indemnifies, defends and indemnifies the customer from all claims for loss, damage, etc. caused by the negligence of a sub-agent. On the other hand, the wording of FONASBA provides that the contractor is not liable for the sub-agent`s negligent acts, unless the agent has exercised due diligence in ordering and supervising that sub-agent. In all cases, the Agent is advised to insist that each sub-agent designated by the Agent is also insured in the same way that Carriers without exception require proof that the Agent maintains professional liability insurance. In addition, as far as possible, the sub-agency contract should be back-to-back with the main agreement so that the responsibilities and obligations imposed by the carrier on the agent can be transferred to the subcontractor under identical conditions.
FONASBA has recently established a standard contract for sub-agencies that meets this requirement by attaching to the document an extract from the liner agency contract concluded between the shipping company and the general agent. Remuneration clauses are often included in executing agency contracts. the director alone. A breach of the Agreement may also warrant termination, but it is useful to include a caveat that this only applies if the breach has not been corrected within a certain number of days after the other party has provided written notice seeking redress for such breach. It is very rare for compensation provisions to be included in an agency contract. Indeed, it is sometimes explicitly stated that the agent undertakes to waive all his rights to compensation to which he is entitled by law or by habit. First of all, it should be noted that the differences between the different hierarchical agency contracts are considerable. Most are adapted by the respective line principal depending on the trade, geographical area and functionality of the agent.
However, there is a standard line agency contract. It was first published by FONASBA in 1978. It subsequently underwent several revisions, but although it was approved by BIMCO, it was not widely accepted in the industry. This is because many line contractors feel that their terms go too far in favor of the agent. It may therefore be possible to create a standard contract that manages a balance between the conflicting interests of the client and the agent. Let us now turn to the specific provisions of hierarchical representation contracts: the appointment of sub-agents often poses difficulties. Most agreements allow the agent to appoint sub-agents with the client`s prior written consent, and it is often useful to add a clause that such prior written consent should not be unreasonably withheld. It is often stipulated between the client and the representative that the latter remains responsible to the former for the performance of the contract by the sub-agent. Finally, online brokers should look very carefully at the content of agreements with their clients. Many clauses contain onerous provisions that can trap the unwary and cause difficulties at a later stage. When in doubt, always seek legal advice, whether from your club, lawyers or your own legal department. Start your cost reduction efforts, with the immediate impact of our service contract.
ITIC is often asked to review draft line agency contracts submitted to its members for signature. Unfortunately, if this is not surprising, these are often biased in favor of the principle of the line. This, of course, reflects the relative strength and negotiating position of both parties, as well as the fact that competition between agents for a new appointment is often intense. Although the club considers commercial considerations to be important, it is clearly dangerous to accept provisions that could have serious negative consequences at a later stage. Previously, agreements between shipowners and agents were oral in nature, but it was ultimately necessary to conclude written agreements due to the increasing number of transactions. These agreements between the contracting entity and the appointed independent representatives have been referred to as the hierarchical agency contract. The services provided by the line agency include documentation, port operations, sales and marketing, equipment control, etc. Thanks to our many shipping agencies, we have a dedicated staff that can handle complaints in any region. This can make all the difference in avoiding significant cargo and/or ship-related claims with good advice and robut risk management procedures. Line agents are appointed by these agreements and in addition to the functions that both parties are required to perform, the agreements also include terms and conditions, termination, liability, warranty clauses, etc.
Nowadays, however, online brokerage contracts are adapted in an unbalanced way and in favor of customers. Tailor-made and FONASBA agreements include the obligation to compensate all claims and costs incurred by the agent due to damages suffered in the performance of his obligations, the customer must also provide the money to cover all payments, etc. Line agents must be careful not to take responsibility for delays in ships or damage to cargo caused by negligence or failure of longshoremen or terminal operators. The agent may be involved in a dispute if he or she was required by the agreement to arrange and supervise the stowage. The situation can be clarified by the insertion of a clause stating that ”the agent shall not be liable for negligent acts or omissions of longshoremen or terminal operators, unless the officer exercises due diligence in appointing such longshoremen or terminal operators” […].
