How to determine compensation for damaged goods during transportation?

On July 04, 2020, I went to A Trade and Service Co., Ltd to use the service of transporting my 01 (one) sports bike from Da Nang to Hanoi. Company A and I made and signed a "Goods delivery record" with a shipping fee of VND 500,000. On July 7, 2020, when the consignee in Hanoi picked up the bicycle, he found that the bicycle had a strong collision resulting in scratches, so the sale of the bicycle between me and the customer could not be performed. I asked the Company to compensate for the total damage, but that Company shall only pay the scratched part. So I would like to know whether I can be fully compensated?

FDVN’s opinions:

Thank you for concerning FDVN’s legal services. Regarding your consulting requests, after studying the relevant legal documents, FDVN Law Firm would like to give you the following advice:

[1]. Obligations of the goods carrier

According to Article 530 of the Civil Code 2015 on contracts for transport of property: “Contract for transport of property means an agreement between parties whereby a carrier has the obligation to transport property to an agreed destination and to deliver it to the authorized recipient, and the customer has the obligation to pay the freight charges.”

According to Article 534 of the Civil Code 2015, obligations of carriers are specified as follows:

“1. Transport the property in its entirety and safely to the agreed destination at the agreed time.

2. Deliver the property to the person entitled to receive it.

3. Pay all costs related to the transport of the property, unless otherwise agreed.

4. Purchase civil liability insurance as required by law.

5. Compensate the customer for damage where the loss of or damage to the property is caused by the fault of the carrier, unless otherwise agreed or otherwise provided by law.”

Based on the above provisions, the fact that Company A transports and scratches your bicycle violates the carrier's obligations not to transport the property safely to the place that both parties have specified "Good delivery receipt". Accordingly, Company A will have an obligation to compensate you for damage to the property.  

[2]. Regulations on compensation for damaged goods during transportation

Article 541 of the Civil Code 2015 on liability to compensate for damage has provisions as follows:

“1. Where a carrier is responsible for the loss of or damage to property, the carrier must compensate the customer for damage, except in the case provided in Clause 3 of Article 536 of this Code.

2. A customer must compensate a carrier and any third parties for damage caused by the transport of dangerous or toxic property which is not safely packaged or the safety of which is not otherwise ensured.

3. A carrier shall not be liable to compensate for damage in the event of force majeure causing loss or deterioration of or damage to the property during transport, unless otherwise agreed or otherwise provided by law.”

Accordingly, the carrier shall have liability to compensate for damage when a property is lost, damaged during transportation unless force majeure occurs, the parties agree or the law has other regulations. Therefore, if when entering into a contract, the two parties do not agree on the compensation for damages as well as the force majeure event does not occur, company A must compensate in this case.

Pursuant to Article 585 of the Civil Code 2015 on principles of compensation for damage:

“1. Actual damage must be compensated in full and promptly. Unless otherwise provided by law, parties may agree on the amount of compensation; on the form of compensation, which may be money, in-kind or the performance of an act; lump-sum payment or payment in installments; and on the method of compensation.

2. The compensation payable by a person having caused damage may be reduced if such damage was caused unintentionally and is very large in comparison to the financial positions of such a person.

3. If the amount of compensation determined becomes unrealistic, the aggrieved person, or the person having caused damage, has the right to request a court or another competent authority to change the amount of compensation.

4. If the aggrieved party is partly his/her fault for causing the damage, that part of the damage shall not be compensated.

5. The party having rights and interests infringed shall not be compensated if such damage incurs due to his/her failure to adopt necessary measures to prevent the damage.”

Above is the advisory opinion of FDVN related to your consulting request on the basis of researching legal regulations. Hopefully, the advice of FDVN will be useful to you.

Nguyễn Thị Lan Anh - FDVN Law Firm

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