Many people assume the Carmack Amendment (Carmack) exclusively controls their cargo claim disputes related to interstate shipments. However, due to certain contract provisions in shipper or broker/carrier agreements, Carmack may take a back seat. A contract that incorporates Carmack for handling cargo claims but also contains clauses that conflict with Carmack can be a recipe for a dispute.

Depending on how they are worded, contract clauses such as claim-filing deadlines, limitations of liability, waiver of salvage value, seal policies, and choice of venue provisions can conflict with Carmack. When a cargo claim arises, one party to the dispute may attempt to invoke a specific contract clause. The other party may then refer to Carmack as a defense to negate the contract clause. The resulting standoff can fracture business relationships or lead to litigation.

Both parties to the contract should be on the lookout for inconsistencies between contractual cargo claim provisions and the law. Equally important, transportation providers should be careful to avoid inconsistencies within their own documents (such as tariffs, bills of lading, credit applications, and contracts). Unfortunately, it is often not until a court interprets the contract with conflicting provisions that the parties have a definitive answer to their dispute. The firm’s Cargo Claim & Freight Charge group, led by Kathleen Jeffries, Thomas Gonzalez, and Clifford Lauchlan, helps clients navigate the cargo claims process, both pre- and post-suit and can be a useful resource for shippers and transportation companies for reviewing existing or potential contractual provisions.