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I own a wholesale import business (LLC); and have contracted

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I own a wholesale import business (LLC); and have contracted with a freight forwarder to handle the customs, ocean cargo transportation and brokerage services. In July, 2012 my Vietnamese manufacturer notified me of faulty work as they were loading the container for shipping. With the assistance of my freight forwarder, we stopped shipment so the faulty product could be removed from the shipment. This action resulted in additional port fees to which all parties agreed to. The manufacturer agreed to accept financial responsibility for the charges associated with removing and reloading the container due to their work. To my knowledge and their confirmation, they did pay for fees assessed to them by the port.

The Vietnamese port assessed additional charges above those paid by the manufacturer, to my freight forwarder; they in turn invoiced these charges to me instead of the Vietnamese manufacturer, I suspect because the freight forwarder did not have a direct business relationship with the manufacturer.

I had agreed to liaison between the manufacturer and the freight forwarder, but I have not received a separate invoice in which to approach the manufacturer with, on behalf of the freight forwarder.

At my request, the freight forwarder has itemized all charges and has assigned financial responsible of each charge (either my company or the manufacturer). I promptly paid my portion of the excess charges. There remains a balance owed of approximately $1,100 to the freight forwarder by the Vietnamese manufacturer.

I had one conversation with the freight forwarders accounting department about 3 months ago regarding the outstanding invoice, and I articulated again my willingness to approach the manufacturer on their behalf, and stated I did not believe I was legally obligated to pay the balance of an invoice on behalf of a company not affiliated with ours.

Yesterday, I received a call from a third-party collection agency regarding the balance of this invoice. I requested, again, an invoice for the outstanding balance so that I may approach the manufacturer on their behalf. The collector said he would obtain and fax this to me. I have not received this yet.

I am a responsible business owner, pay my obligations promptly so I am not very familiar with the collection process and what issues escalate to legal suit. I am a little confused why my initial position to help connect the freight forwarder with the manufacturer was not only met with no response for 3 months, but resulted in a call from a collections agency. I’m not sure how to interpret or manage this.

I have two questions: (1) am I responsible for paying this outstanding invoice? (2) Can the freight forwarder sue me for the amount owed by another company, and is my position strong?

William B. Esq. :

Dear Customer, as it appears you are already aware, the liability you are concerned about follows actual contractual obligations as opposed to good will gestures. While I may have misunderstood your posting (I do apologize, this does sometimes happen in this forum, particularly with complex fact patterns), unless you have contractually obligated yourself for the additional port fees or other charges ow being assessed.

William B. Esq. :

If you are in fact contractually obligated for the fees (were either in direct contract with the Port, or agreed to pay the fees directly - in these transactions the shipping company often is the one in contract with the Port, but you need to check your contracts), you may be liable to the Port for their fees. Once these fees are paid you will have a claim against your manufacturer or shipper for (1) repayment of the fees; and (2) possibly, a claim for damages based on their failure to pay.

William B. Esq. :

As far as the collections goes, usually these agencies try to settle matters without resorting to court action, they may be willing to negotiate a settlement (often they have purchased the debt for less than its actual value), but they usually are firm on recovery of the entire amount. If they do choose to pursue this matter to Court Action, they may do so, but given the relatively small amount ($1,100.00), this is a small claims matter, and can be dealt with with minimal cost by yourself, unfortunately as an LLC you will need an attorney. You are smart to ask for an invoice and contract - unless they can show that you are contractually responsible (as opposed to a "good will" responsibility) they will not have a strong claim in court.

William B. Esq. :

I hope that the above information is helpful, if you have any questions, please use the “Reply to Expert Link” and I will follow up promptly. Once you are satisfied with your answer, please rate my service by clicking on the “OK” “GOOD” or “EXCELLENT” buttons, if you believe my service is anything less than “OK” please stop and tell me what additional information or clarification you need to make your experience satisfactory.

If you have any further questions, or if I missed or misunderstood what you were asking, please do ask and I will follow up promptly, You may continue to follow up if further questions arise even after rating my response.




Dear XXXXX, thank you for your response. My only follow up question is regarding to what constitutes a contractual obligation. While I do have a signed contract with them for services, I'll have to pull it out and read it thoroughly to see if I accepted terms falling under this circumstance. If this agreement exists in my service contract, I would have thought they would have reminded me of that. I have not received any written or mailed correspondence for payment from this company, no late notices, statements, demands, etc... Would my agreement via email to forward an invoice to the Vietnamese manufacturer create an assumption of financial repayment from me?

William B. Esq. :

Dear Customer, bearing in mind the fact that (1) I have not seen either the contract or the e-mail; and (2) I cannot give you specific legal advice, I would venture the following. Your contract for services (assuming it is with the Port), likely obligates you for all services - you are smart to read the contract thoroughly, the terms of the contract are key in determining what your duties and obligations are. The e-mail authorizing additional services (regardless of where the invoice is to be sent) is likely to be read as an extension of the contract, the manufacturer never entered into a contract with the Port to agree to services, you did. (Remember, this is my assumption, and you are wise to review your documents to determine your actual obligations).


thank you.

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