TT Talk - German Commercial Code contains no liability limit for loss or damage to goods during warehousing

  • Date: 20/08/2009
  • Source: TT Talk 122

A Singapore based transport operator undertook to provide logistics services for a large German manufacturer. The agreement incorporated the German manufacturer’s model contract, expressly excluded application of the operator’s trading conditions and was subject to German law and jurisdiction.

Readers may know that the German Commercial Code (HGB) deals with carriage, forwarding and warehousing contracts in three consecutives chapters. Under carriage and forwarding contracts, the operator’s liability is limited to 8.33 SDR per kilogram unless the parties agree to digress from that limit within the range of 2 SDR to 40 SDR (provided they comply with the requirements listed in section 449 HGB or section 466 HGB).

In contrast, the chapter on the warehousing contract (sections 467-475h HGB) contains no financial limits for loss or damage to goods. The parties are free to agree their own liability regime (subject to rules on unfair contract terms), and many warehouse operators can routinely incorporate favourable warehousing or general industry conditions.

Not so the Singapore based operator whose trading conditions were expressly excluded. The TT Club, in its contract review service, made this operator aware that he would face unlimited liability for his warehousing operations, with goods worth several million USD at one location. Fortunately, the logistics operator was able to limit his exposure in further negotiations with his client.

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority. 

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.

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