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Every day, thousands of loadings take place at loading docks under EXW terms, where practice
has shaped one of the most misleading interpretations of EXW.
In how many cases does the buyer perform the loading? Do you know of any?
Not many, right? Yet, this is how it should be according to EXW rules: responsibility and transfer of goods at the ramp. Awareness differs – sometimes parties are aware of this and the seller performs "courtesy loading activities," while other times they believe this is the essence of EXW.
In the event of damages incurred during loading, theory, practice, and jurisprudence usually follow the literal wording of EXW – in short, the seller is not responsible for damages incurred during loading, acting out of courtesy or as a gratuitous agent of the buyer.
But it's not always the case, as a single signature and a warehouse manager's stamp can change everything. And that's what this story is about. A brutal business reality sealed by a landmark ruling of the French Supreme Court (Cour de cassation) in September 2016.
Why is EXW so popular?
The EXW (Ex Works) rule is the best tool for sales departments. For a manufacturer, it means an ideal setup: you prepare the goods, place them on the warehouse floor, and your job is done. All transport risks, costs, and export formalities pass to the buyer. Incoterms theory in its purest form.
Reality? A foreign driver arrives. He doesn't speak the language, isn't certified to operate forklifts, and your facility's internal health and safety procedures prohibit him from entering the warehouse area anyway. What happens? Your employee gets on the forklift and loads the goods. Everyone does this.
The moment the forklift's tines lift the load, you enter a legal gray area. EXW supposedly exists, but it's highly dependent on interpretation, and your company can unknowingly assume the role of the loader with all its consequences.
EXW is the most misinterpreted and misused trade rule. When costly damage occurs, courts do not look solely at the three-letter abbreviation on the invoice. They analyze the actual conduct of the parties.
Disaster Case Study: The Emin Leydier Case before the Cour de cassation
To understand the gravity of the issue, let's go back to case n°14-23.137, which was ultimately decided by the Commercial Chamber of the French Supreme Court.
A French paper manufacturer (Emin Leydier) sold giant paper rolls, weighing over 20 tons in total, to a contractor in Turkey. The contract stipulated strict terms: Ex Works. The buyer arranged the transport chain through intermediaries. The goods were successfully loaded into a container at the seller's factory. The truck set off towards the port but didn't get far. At the first major roundabout, the road train suddenly lost stability and overturned. The tractor, trailer, and the massive cargo suffered drastic damage.
Experts' Verdict
The insurance experts' analysis was merciless towards the driver – he wasn't speeding, he was sober, and the road surface was dry. The direct cause of the overturn was the faulty placement, wedging, and securing of the massive paper rolls inside the container. While turning at the roundabout, the cargo shifted, uncontrollably disrupting the vehicle's center of gravity.
Fortunately, there were no human casualties.
The carrier's insurer, seeking recourse for the damaged equipment and goods, directly targeted the seller. The French manufacturer rejected liability for the damage, citing the EXW terms.
In its view, the seller's obligations ended once the goods were made available at the warehouse, and any claims should be directed to the buyer or the carrier.
Courts of two instances, including the Supreme Court, rejected this line of defense.
Why did the international giant lose the case, even though the commercial documents stated "EXW"? The court based its verdict on two undisputed material pieces of evidence.
Evidence 1: Signature on the Bill of Lading
On the international bill of lading, the seller's employee signed and affixed the company seal in the "expéditeur" (sender/goods issuer) field. For the court, this was a clear message: by signing this document without any reservations, the seller formally declared that it was acting as the active sender of the cargo. The court considered this a binding declaration of intent that overrides the default intentions of a pure EXW.
Evidence 2: Monopoly on Handling Equipment
Over 20 tons of paper didn't load itself. The seller had specialized overhead cranes and heavy-duty forklifts. Its personnel performed the physical work. The court noted that this was not "friendly assistance" but a consistent, repeatable operational practice of the factory. Since the seller was the only one with the technical means and carried out the operation, it is responsible for its technical correctness.
Final verdict
The Cour de cassation dismissed the manufacturer's appeal, stating the principle:
“Despite the parties choosing the Incoterms Ex Works rule, the seller, through its actions, assumed actual responsibility for the loading operations and must answer for the harmful consequences of their faulty execution.” The result? Compensation costs, lost goods, and enormous legal fees! And a multi-year dispute. In this case, physical action and a signature on the transport document carried more weight than a three-letter abbreviation on a commercial invoice.
What does this case teach Polish export businesses?
Although the case took place in France, the legal mechanism is identical in Poland, Germany, or Italy. Most Polish industrial exports are carried out using their own ramps and forklifts. Here are four fundamental lessons from this precedent:
Lesson 1: EXW on an invoice is often a legal fiction
If you issue an EXW invoice, but your staff loads the goods onto the vehicles provided, you are living in a false sense of security. In the event of a disaster, the court may classify your action as tortious liability (arising from a wrongful act or professional negligence) under the general provisions of the civil code. Incoterms may not protect you here.
Lesson 2: A warehouse stamp is a legal declaration, not a formality
Drivers frequently present CMR documents for signature under time pressure. Every stamp of your company in the 'sender' box is written proof for the insurer that you are responsible for the condition of the shipment at the moment of its release. Training warehouse staff is an absolute priority.
Lesson 3: The official ICC position is not a suggestion
The International Chamber of Commerce (ICC), in its Incoterms 2020 guidelines, strongly advises against using EXW if the seller has any involvement with loading. The ICC explicitly points to the FCA (Free Carrier) rule as the only appropriate and safe solution for such transactions.
Lesson 4: loading and packaging are interconnected.
The attempt to argue that placing goods in a container is a "form of packaging" (which, under EXW, is the seller's responsibility) rather than "loading" was rejected by the court. If you perform an action that directly affects the stability of the cargo in transit, you are responsible for the ultimate safety of the transport.
How to protect your company from the EXW trap?
If EXW terms dominate sales in your company, you must immediately implement four corrective steps:
A radical audit of transport documents
Check how your warehouse staff sign CMR consignment notes. Strictly prohibit stamping the company seal in fields designated for the carrier or the formal sender of the order if you operate under pure EXW.
Change your commercial policy
Replace EXW with the FCA Seller's Warehouse rule. For the buyer, the price remains unchanged, but
responsibility for loading is clearly and formally assigned to you – which allows for its
proper insurance and risk assessment.
Implementing precise contractual clauses
If the buyer insists on EXW, include the following clause in the sales contract: "All loading operations
performed by the seller are carried out solely at the buyer's cost, risk, and
responsibility, as the seller acts merely as the buyer's technical assistant."
Verification of insurance policy (Liability and Cargo)
Ensure your liability insurance covers damages incurred during the loading of third-party goods. Standard policies often contain dangerous exclusions in this area.
At Insphera, we help analyze logistics processes, transport documentation, and operational practices to mitigate risks that often only become apparent at the time of damage. Contact us if you want to verify whether your export procedures align with your company's actual liability.
Source documentation:
- French Supreme Court ruling: Cour de cassation, Chambre commerciale, 13 September 2016, n°14-23.137
- Court of Appeal ruling: La Cour d'appel d’Aix-en-Provence 27 May 2014
- Legal analysis: F. Van Doorne-Isnel, "Incoterm Ex Works et responsabilité du chargement", CMS Law, 2017
We invite you to read the previous parts of the dark stories:
1. https://insphera.webflow.io/blog/po-co-nam-fob-mroczne-historie
2. https://insphera.webflow.io/blog/naprawde-cif-mroczne-historie-2