Who is responsible for paying for LTL shipments when a broker is involved?

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Who is responsible for paying for LTL shipments when a broker is involved?

We have shipped LTL shipments for our business for several years. We recently started using a broker. We are now having problems with one freight carrier that the broker has not paid. We have paid the broker for these shipments. Are we liable to the freight carrier?

Asked on November 1, 2010 under Business Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Who is liable to the carrier depends on who actually contracted with the carrier. If your company either directly contracted with them, or indirectly (i.e. the broker was given the power to contract on your behalf, and did so), then you are liable; if the broker contracted, not you, the broker would be  liable. If you paid the broker for services (e.g. to arrange shipping) which he did not provide, you probably have a breach of contract lawsuit vs. the broker; depending on circumstances, you might also have a claim in fraud or conversion (basically, theft). Assuming you're not talking about so little money that, regardless legalities, it's practically the better course of action to "write off" the lose and move on, you should consult with an attorney about making sure you vindicate all your rights. Bring all the contracts, documents, correspondence, etc.


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