Sixth Circuit Declines to Find Third-Party Beneficiary Bounded by Bill of Lading Terms | ZFZ Postcard Cases
The Sixth Circuit Court of Appeals recently affirmed the Middle District of Tennessee’s finding for lack of personal jurisdiction over grain purchaser (Zen-Noh) in a suit brought by the carrier (Ingram) for payment of invoices carrier incurred including fleeting, wharfage, and shifting.
Ingram initiated this action in U.S. District Court for the Middle District of Tennessee pursuant to the forum selection clause in the bill of lading (BOL).
The BOL incorporated Ingram’s terms, which included the forum selection clause and “to bind any entity that has an ownership interest in the goods.” Ingram attempted to bind Zen-Noh to the terms of the BOL despite the fact that the BOL was entered into between Ingram and the grain seller. The Sixth Circuit found Zen-Noh to be a third-party beneficiary of the BOL who can only be bound to the terms through consent by the following actions: (1) filing suit; (2) its course of conduct; or (3) accepting through its agent. The Court found that Zen-Noh did not perform any of the actions to establish consent, and despite Zen-Noh’s status as a beneficiary of the BOL, status alone does not create contractual obligations for Zen-Noh.
Read more on this decision here.