Imagine this scenario: you’re a freight forwarder or a shipper who has arranged a crucial international transport. The shipment arrives, but… it’s damaged. The consignee either rejects the goods or files a claim. Your first, completely logical reaction is to say, “I’ll compensate my client for the damage and deduct that amount from the freight I owe to the carrier.”

It sounds fair, doesn’t it? After all, the carrier is responsible.

However, this instinctive move can turn into a costly mistake that not only fails to solve the problem but also drags you into legal disputes with an unfavorable outcome. Today, at Cargofort, we’ll examine a real case from Bulgarian court practice that perfectly illustrates why this approach is so risky.

 

The Story: One Shipment, One Damage Claim, One Wrong Decision

A Bulgarian company (“The Forwarder”), acting as the principal, hired “The Carrier” to transport metal products from Bulgaria to Germany. Upon delivery, “The Consignee” discovered significant corrosion on the goods, made a corresponding note in the CMR waybill, and then refused to accept the shipment.

“The Shipper” of the goods filed a claim against “The Forwarder” for the damage, amounting to €1,800 (equivalent to 3500,00 BGN). “The Forwarder” did what many others would do – they paid their client for the damage and then deducted the same amount from the freight owed to “The Carrier,” paying only the remaining balance.

“The Carrier,” however, did not agree with this unilateral decision and filed a lawsuit for the unpaid portion of the freight.

What the Court Decided and Why: The Key is “Liquidated Claim”

The court reviewed the case and issued a ruling that might seem unfair at first glance but is perfectly lawful. It ordered “The Forwarder” to pay “The Carrier” the full outstanding freight (€1,800), along with all accrued interest and legal expenses.

Why? Because while the law allows for something called an out-of-court set-off, it is subject to strict rules. One of the most important rules is that the mutual claims must be liquidated.

A liquidated claim (or ‘liquid claim’) is one whose existence and amount are undisputed – either because the other party has acknowledged it in writing, or because it has been established by a final court judgment.

In our case, “The Forwarder’s” claim against “The Carrier” for the damages was not liquidated. “The Carrier” had never admitted liability for that amount. The fact that “The Forwarder” had paid their client does not automatically make “The Carrier” a debtor for that same amount. The carrier’s liability for damage must be proven and established through the proper channels.

The court made it clear: the obligation to pay freight and the liability for damages are two separate issues. You cannot offset one against the other at your own discretion.

The Bitter Result: Paying Twice

In the end, “The Forwarder” found themselves in the worst possible position:

• They paid €1,800 to their client for the damaged goods.
• They were ordered to pay €1,800 to “The Carrier” for the unpaid freight.
• They were also ordered to pay the accumulated interest and legal fees.

A single misstep, driven by logic but not by legal knowledge, cost them double.

Lessons for Your Business: How to Avoid the Trap

✔️ Never perform a unilateral set-off. This is the most critical lesson. Withholding amounts from payments due without the explicit written consent of the other party or a court order is an invitation to a lawsuit you are likely to lose.

✔️ Keep obligations separate. When damage occurs, the correct procedure is to:

• • Pay the due freight to the carrier within the agreed timeframe.
  • Simultaneously, file an official, written, and well-documented claim against them for the value of the damage.

✔️ Communicate officially. Notify the carrier of the problem immediately. Send them all relevant documents – protocols, photos, claims. Try to negotiate a settlement.

✔️ Consult with experts. Before taking any action, speak with your insurance broker or legal advisor. At Cargofort, we have extensive experience with such cases and can guide you toward the right steps that will protect your interests without involving you in unnecessary costs and litigation.

In transport and logistics, every detail matters. The right approach not only saves money but also preserves good partnerships and protects your reputation.