How can I protect my transport company from contractual risks?
February 23, 2024 | 55,00 EUR | answered by Anna Sontheimer
Dear Sir/Madam Lawyer,
I run a transportation company and am faced with the challenge of protecting myself against contract risks. Lately, I have been dealing more and more with customers who delay their payments or even refuse to pay at all. This not only leads to financial problems, but also to increased administrative work and a bad reputation in the industry.
I have already tried to contractually stipulate that payment must be made within a certain period and that late payment will incur interest. Unfortunately, some customers have not adhered to these agreements and I am now wondering how I can better protect myself.
I am considering whether it would be advisable to work with debt collection agencies or if I should take other legal steps to enforce my claims. Are there specific clauses or insurances that I can include in my contracts to protect myself against such risks?
I would greatly appreciate your professional assessment and possible solutions to effectively protect my transportation company against contract risks. Thank you in advance for your support.
Sincerely,
Emma Bauer
Dear Mrs. Bauer,
Thank you for your inquiry regarding the contract risks in your transportation company. It is understandable that payment delays or defaults can cause significant financial and administrative difficulties. It is important that you protect yourself from such risks in order to maintain the stability and reputation of your company.
Firstly, it is positive to hear that you have already tried to establish in the contracts that payments must be made within a certain period and that late payment will incur interest. Unfortunately, sometimes this is not enough to prompt delinquent customers to pay.
One way to better protect yourself could indeed be to collaborate with debt collection agencies. These specialized companies can help you recover outstanding debts and take legal action to collect your money. The costs of hiring a debt collection agency could prove to be worthwhile in the long term, as it will help secure your liquidity and save you time.
Furthermore, you could include certain clauses in your contracts that provide you with additional protection. For example, you could contractually agree that in case of non-payment within a certain period, you have the right to retain the goods. You could also require a security deposit or advance payment to minimize the risk of payment defaults.
It could also be beneficial to take out a transport and freight legal insurance. This insurance can protect you from payment defaults or other risks in the transport business and ensure your financial security.
Overall, it is advisable to use a combination of contractual arrangements, debt collection agencies, specific clauses in contracts, and insurance to effectively protect your transportation company from contract risks. I recommend seeking advice from a specialized attorney in transport and freight law to develop tailored solutions for your company.
I hope this information is helpful to you and I am available for further questions.
Kind regards,
Anna Sontheimer, Attorney specialized in transport and freight law
