Bremen Clause

Definition and Concept of the Bremer Clause

Die Bremer Clause is a specific contractual clause in German commercial and transport law. It primarily regulates the transfer of risk and costs in freight or transportation contracts, usually in maritime trade. Originally, the clause was mainly used in Bremen bills of lading, from which it takes its name. It has a significant impact on the rights and obligations of the contracting parties regarding liability for damages and losses during transport.

Legal Basis and Classification in German Law

The Bremer Clause is not explicitly regulated by law but has become established as a trade practice. In German law, it is especially relevant in the context of the German Commercial Code (HGB), primarily in connection with §§ 407 et seq. HGB (freight law). It can become part of any transportation contract through individual agreement, and is regularly incorporated via general terms and conditions (AGB) or as a specific individual clause in bills of lading or handling documents.

Bremer Clause and International Regulatory Frameworks

The clause is mainly applied in the context of international transports, such as by ship, rail, or road. Against the background of international frameworks like the Incoterms, it is considered a national peculiarity, which must be compared with international regulations depending on the contract’s structure.

Content and Function of the Bremer Clause

Transfer of Risk and Costs

The core of the Bremer Clause is the shifting of the statutory transfer of risk: After the shipping notice is received by the recipient (shipper, buyer), the risk does not—as generally provided under German law—pass upon loading onto the vessel, but already upon the goods leaving the warehouse or at the latest at the quay of the port of departure. This means that from this point onwards, the recipient bears the risk of loss or damage to the goods.

Modification of Liability and Insurance Aspect

The Bremer Clause largely excludes or limits the carrier’s liability. Under the clause, the carrier is typically only liable for damages up to the time the consignment is handed over at the port of departure. Thereafter, the recipient bears the risk, especially for damages caused by force majeure or by third party interference.

As a result, the conclusion of transport insurance for the phase after the transfer of risk becomes particularly relevant for the recipient, since from this point on they must bear the costs for any damage to the goods themselves.

Application and Importance in Contract Practice

Typical Areas of Application

The Bremer Clause is typically used in freight and transport contracts for export and import business, especially in maritime trade via the ports of Bremen and Bremerhaven. It is applied in both liner and tramp shipping but may also be considered for multimodal transports due to its defining effect, provided the parties agree accordingly.

Effects on Contract Practice

The use of the Bremer Clause shifts the liability regime in favor of the sender or carrier. For the recipient and possibly intermediaries, therefore, careful risk analysis and insurance coverage become significant. The clause also affects the burden of proof in case of transport damage: After the risk passes, the recipient must independently assert and prove any claim for damages against the carrier or third parties.

Distinction from Comparable Clauses

The Bremer Clause is to be distinguished from other transport clauses, such as the Hamburg and Rotterdam Clauses. While the Hamburg Clause determines the transfer of risk only upon loading onto the vessel (“Franco on board”), the point of transfer under the Bremer Clause occurs significantly earlier (“Franco quay” or “ex quay”). The exact content and scope of the clause are specified by agreement in the respective transport contract.

Case Law and Disputed Issues

Recognition in the National and International Context

Courts recognize the Bremer Clause as a permissible individual agreement, provided it has been effectively incorporated into the contract and does not constitute an inadmissible disadvantage to a contracting party as defined in § 307 para. 1 BGB (unreasonable disadvantage in general terms and conditions). Case law and legal literature contain numerous examples of the interpretation and application of the Bremer Clause in individual cases.

Common Points of Dispute

Typical points of dispute arise in determining the exact point of transfer of risk, especially in cases of delays during loading, damage to goods during handling at the quay, or issues during storage between the arrival of goods and takeover by the carrier. Here, the contracting parties are required to establish clear regulations and ensure transparent documentation of the transfer points.

Summary Assessment

The Bremer Clause is an established component of transport contract drafting in German and international trade. Its effect is based on the early transfer of risk and costs to the recipient, combined with a limitation of the carrier’s liability. It offers the sender legal certainty and predictability, while requiring increased risk management and insurance from the recipient.

Literature

Baumbach/Hopt: Handelsgesetzbuch Commentary, § 452 HGB
Rabe: Transport Law. Handbook for the Transport Law Mandate
Prölls/Martin: Transport Insurance

Weblinks

Note: This article serves to provide information on the Bremer Clause in the context of German transport law and does not constitute legal advice.

Frequently Asked Questions

When does the Bremer Clause apply in insurance law?

The Bremer Clause is primarily applied in marine insurance law, especially in transport and goods-in-transit insurance. It is often used to clarify and specify liability rules in cases of loss or damage to goods during transport. The clause typically applies when it is agreed that the insurer’s obligation to provide coverage continues as long as the insured interest exists—regardless of whether the cargo is still physically present on the means of transport or not. Its application therefore requires that an appropriate contract expressly incorporating the Bremer Clause exists between the insurer and the policyholder, either indirectly via general insurance terms and conditions or directly in the insurance contract. Particularly in international transport with differing legal views on risk allocation and insurance duration, the Bremer Clause is used to create clear rules.

What is the effect of the Bremer Clause on the insurer’s obligation to provide coverage?

The Bremer Clause expands the insurer’s obligation to provide coverage by extending the period during which insurance cover exists—namely until the point at which the insured interest has lapsed. This means in practice that the insurer is also liable for damage occurring after the goods have been unloaded or the means of transport has arrived but before the rightful consignee loses their interest, for instance by refusing acceptance or upon transfer of ownership. This protection is especially crucial when there are uncertainties about the transfer of title or delayed acceptance, since it prevents “gaps” in insurance coverage that might otherwise arise from deviating Incoterms or country-specific regulations.

How does the Bremer Clause affect residual liability in transport insurance?

The Bremer Clause has a significant impact on what is known as residual liability, i.e., the period after the expiration of the conventional insurance period. Normally, insurance coverage ends when the means of transport is unloaded at the destination. However, by applying the clause, insurance protection remains in force until the insured interest naturally or legally lapses. Thus, the Bremer Clause ensures that the policyholder remains insured against damages even if there is a gap between the arrival of the goods and their acceptance by the recipient, during which there would otherwise be no insurance coverage.

What role does the Bremer Clause play in determining the insured interest?

From a legal perspective, the Bremer Clause defines very precisely when the insured interest begins and ends. It ensures that coverage begins when the insurance interest starts, for example, with the loading of the goods, and ends only when the policyholder has passed on the economic risk to another party, i.e., upon transfer of ownership or acceptance of the goods by the recipient. The clause thereby creates legal certainty regarding the exact time at which the allocation of risk and insurance obligations shift, which is especially important in complex supply chains involving multiple parties.

How does the Bremer Clause relate to statutory provisions of transport insurance law?

The Bremer Clause represents a contractual agreement that can deviate from the statutory provisions of the German Insurance Contract Act (VVG) and other relevant regulations, to the extent permitted. Specifically, it supplements or modifies the “residual liability” provided for in § 88 VVG. While the law generally sets narrow limits for the period of insurance, the Bremer Clause expressly extends this—so long as the insured interest exists. In legal practice, it is recognized that individually agreed clauses or clauses contained in general terms and conditions, such as the Bremer Clause, take precedence over non-mandatory statutory law, so they can effectively supersede statutory provisions in that respect.

What legal risks does the use of the Bremer Clause carry in international trade?

The use of the Bremer Clause in an international context can entail certain legal challenges. On the one hand, there is a risk that different national legal systems will take divergent positions concerning the scope and effectiveness of the clause, leading to interpretative disputes, particularly regarding the commencement and termination of the insured interest. Furthermore, the compatibility of the Bremer Clause with mandatory legal provisions of the relevant country may pose difficulties. Especially when foreign law is applicable, discrepancies with German contractual practice may arise, which in case of dispute could require judicial clarification in the respective country.

Can the Bremer Clause be individually adapted and, if so, how?

Individual customization of the Bremer Clause is legally permissible and frequently practiced. The parties to an insurance contract can modify the provisions of the clause, for example, by defining or limiting the end of the insured interest more precisely, such as by stipulating a fixed period after unloading or agreeing to alternative arrangements for the transfer of ownership. Restrictions exist only to the extent that mandatory legal requirements—especially regarding consumer protection—may not be circumvented. In principle, however, adjustments are possible to the benefit or detriment of the policyholder, provided they are formulated clearly and unambiguously.