A consignment note evidences a written agreement between you and
your customer. It is not only a receipt for the goods at the time
of pick up and again at delivery but more importantly, it sets out
the terms and conditions that govern your carriage of the
2. Is a consignment note important?
Yes. Unless you have a written agreement with your customer, the
courts will imply their own conditions of carriage. This means that
you will be taken to have promised to use all due care and skill in
the carriage of the goods.
3. What does this mean?
You will be legally responsible if any goods are lost, damaged
or destroyed unless you can prove that you have used 'proper
care'. This is a high threshold and the onus is on you to prove
4. The customer already has insurance. Why should I worry?
Because if the unthinkable occurs and the goods are damaged, you
are still liable. The customer's insurer will pay out the
customer's claim. But the insurer will then turn to you and sue
you in the name of the customer. This is called
5. What if I am a subcontractor and I have no contact with the
owner of the goods. Can I still be liable?
Yes. Despite the owner not having any contractual relationship
with you, you are the 'bailee' of the owner's goods and
as such, the owner is entitled to sue you on this basis.
Alternatively, the owner can sue your customer (the principal
carrier) who may then in turn sue you for any loss or damage.
6. So, if I subcontract to other large transport firms, who do
I get to sign the consignment note?
As a subcontractor, your contract is with the carrier who has
asked you to undertake the job. That carrier should sign your
consignment note. Do not have the carrier's customer sign your
consignment note. You have no contractual relationship with this
7. What happens if the carrier's customer signs the
consignment note and an incident occurs?
Your consignment note is essentially worthless. You do not have
a written agreement between you and your customer governing the
terms of the delivery. You revert to the position of having to
prove that you have used 'proper care' in the delivery of
8. What if no one is available to sign my consignment note at
the pick-up address?
In order to avoid this type of scenario, if you work for regular
customers we recommend you enter into a 'global' written
agreement with them which includes all of the terms and conditions
which are written on the back of your consignment note. You will
then have a 'fallback' position in the event that you
can't get the consignment note signed on a particular day.
9. My current consignment note contains a clause that says I am
not liable for anything that happens to the goods even if I am
grossly negligent. Won't this protect me?
Not necessarily. Courts have said that a properly worded
exclusion clause can work to protect a carrier but you will run
into difficulties if:
the clause is ambiguous or capable of having more than one
meaning – in which case it will be construed in favour of the
your behaviour as a carrier is so far outside what you agreed
to do such that you should not be entitled to rely on the clause.
An example of such behaviour might be if one of your drivers
"borrowed" a set of golf clubs and took them to the
driving range and damaged them; and
your customer is not the owner of the goods. In these
circumstances, the owner may sue you and argue that your customer
had no authority to agree to your terms and conditions of
Cooper Grace Ward acts for a variety of road transport operators
from owner drivers to national logistics companies. We also act for
heavy machinery and earthmoving contractors and for insurers
involved in the heavy motor insurance industry. We can help your
transport business protect itself with comprehensive consignment
notes and all aspects of your contractual requirements.
If you would like to discuss your business requirements, please
do not hesitate to contact Gillian Bristow on (07) 3231 2925 or
Kate Whalan on (07) 3231 2909.
Winner – EOWA Employer of Choice for Women Citation 2009,
2010, 2011 and 2012
Winner – ALB Gold Employer of Choice 2011 and 2012
Finalist – ALB Australasian Law Awards 2008, 2010, 2011 and
2012 (Best Brisbane Firm)
Winner – BRW Client Choice Awards 2009 and 2010 - Best
Australian Law Firm (revenue less than $50m)
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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