THE AUSTRIAN GENERAL FREIGHT FORWARDING CONDITIONS AND THE AUSTRIAN FREIGHT FORWARDING INSURANCE SCHEME
Rechtsanwalt, Vienna.
Most businesses have to have goods forwarded regularly or at least occasionally, and thus require the services of freight forwarders. In the performance of the forwarding damages occasionally occur. In such a case, the Austrian freight forwarder’s customer finds himself confronted with the Austrian General Freight Forwarding Conditions [Allgemeine Österreichische Spediteurbedingungen—AÖSp] and the reliefs and limitations of the freight forwarder’s liability standardised in them.
History of the AÖSp
As the freight forwarder’s then practically unlimited liability risks were not in proportion to his returns, quite some time ago efforts began to substitute and to supplement statutory law by autonomous regulations. In Germany, following negotiations between various commercial organisations, the German General Freight Forwarding Conditions [Allgemeine Deutsche Spediteurbedingungen—ADSp] were published as early as 1927. Based on a German decree of 1935, an order of the German “Reichs” Transportminister of December, 1939, declared these conditions binding for all business contracts between members of the then “Reichsverkehrsgruppe Spedition and Lagerei” and their customers. This “Reichs” decree of 1935 was, after the 1939-45 world war, declared void in liberated Austria. The Fachverband [official organisation] of freight forwarders within the Transport Section of the Austrian Federal Chamber of Commerce and Industry, revised the German freight forwarding conditions somewhat, adjusting them to Austrian law, and published them in 1947 as Austrian General Freight Forwarding Conditions [AÖSp].
Legal Nature of the AÖSp
The AÖSp are not statutory law in the formal and material sense and they therefore do not bind the general public. Their nature is rather that of a master contract, on which the individual contracts of the freight forwarders with their principals are based; the members of the Fachverband [official organisation] of freight forwarders being obliged to perform their commercial activities according to the AÖSp.
Accordingly, the standing view of the Austrian Courts is that the rules of the AÖSp are binding for the freight forwarder’s customer only if the AÖSp were either expressly or at least by tacit consent agreed to, and thus became the basis of the contract between the freight forwarder and his principal.
Such a tacit consent, whereby the AÖSp became the basis and content of the contract between sender and freight forwarder, is as a rule accepted by the Austrian Courts if the freight forwarder’s principal is a merchant under the Commercial Code, who while contracting, knew, or—according to the nature of his business—had to know of the existence of the AÖSp. For merchants who have goods forwarded
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How to make business deals run as smoothly as possible: Here is all the information you need about drawing up contracts, defining prices and fixing payment terms in Austria.
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An offer to an Austrian buyer should contain the following information:
- Precise Description of Goods:
- Price including discounts in EUR or USD
- Delivery terms and conditions in accordance with Incoterms
- Illustrated advertising brochures
- Product samples are common for consumer goods
- Delivery date
- Maximum quantity
- Period of validity of the offer
Offers may be written in English or German.
Prices may be quoted in EUR or US Dollars. Goods are usually supplied with either DDP [Delivery Duty Paid] or DDU [Delivery Duty Unpaid] and CIF [Cost Insurance Freight]. We recommend using INCOTERMS.
Confirmation
Upon agreement of an order, Austrian companies expect an order confirmation from the supplier. If any conditions of the offer have changed in the order, the supplier must clearly draw attention to these.
Contracts
Contracts with Austrian buyers may be quite free in both form and content. The main restrictions on content regard consumer protection specifications.
Form
Contracts can be agreed both verbally and in writing, as the key factor is the expression of will, but the written form is recommended.
Ownership Transfer and Delivery Terms
Transfer of ownership when selling or purchasing goods does not occur on the signing of the contract, but when the goods have been received by the buyer or carrier. INCOTERMS are recommended for defining delivery terms and conditions.
Transfer of payment is easily conducted within the framework of the liberal currency controls via bank or postal transfer - there are no restrictions. Payment deadlines are agreed on an individual basis and common practices differ from branch to branch.
The following may be used as a general guideline:
- within ten days of invoice issue with a discount
- within thirty days of invoice issue [net]
Suppliers often insist on a confirmation of the placed order. A retention of property rights [Eigentumsvorbehalt ] is also commonly agreed. This means that the goods remain the property of the seller until full payment has been made.
To ensure your rights are protected, there are several instruments available. The retention of property rights is widely used and ensures the agreed sales price is paid by the buyer to the seller.
Retention of Property Rights
The seller retains the rights to the property until full payment has been made by the owner of the goods. Retention of Property Rights can be agreed in any form, although a written agreement is strongly recommended. In the case of bankruptcy of the buyer, the seller has the right to reclaim all of the delivered goods which come under the retention of property rights agreement.
Other Methods for Securing Payment
Other common forms of property rights include:
- Deposit of security[Pfand]
- Personal guarantee
- Bank guarantee
- Transfer of legal rights [Zession]
- Mortgages
Incoterms are standardized trade definitions to support the uncomplicated and internationally accepted sale and delivery of goods world-wide. They were drawn up, published and amended by the International Chamber of Commerce [ICC] and its headquarters in Paris.
Incoterms regulate for the seller – and to a lesser extent the buyer - who organises the transport, who pays for it, and who carries the risk in the case of transport problems. Subject to agreement, the Incoterms can make up an important part of complex import/export contracts, and should then be integrated into the contract to fit in with all other legal clauses.
Incoterms make international trade easier and help traders in different countries to understand one another through a 'common language'. Some of the most famous Incoterms include EXW [Ex Works], CIF [Cost Insurance and Freight] and DDU [Delivered Duty Unpaid]. The latest version of Incoterms is from 2020.