Reported / Citable
Background
C&A Truck Brokerage and National Fresh Express entered into a Broker-Carrier Agreement in December 2024, under which C&A would broker shipments and NFE would transport them. In April 2025, C&A brokered a shipment of temperature-sensitive strawberries loaded onto NFE’s truck in California. The bill of lading expressly specified that the reefer (refrigeration unit) must maintain a temperature range of 32°F to 34°F with a continuous temperature setting.
When NFE attempted delivery two days later, the strawberries were rejected due to elevated temperature. Upon investigation, the parties determined that NFE had failed to run the reefer at the continuous temperature setting throughout transport. NFE admitted this failure in its responses to requests for admission. C&A paid the customer $44,967.90 to resolve its liability, then sued NFE for breach of contract in June 2025.
NFE conceded the factual breach but argued the court should deny summary judgment because the bill of lading’s temperature instructions were not clearly incorporated into the parties’ Agreement, rendering the contract ambiguous on this point.
The Court’s Holding
The court held that the bill of lading’s temperature instructions were clearly incorporated by reference into the Broker-Carrier Agreement and were binding on NFE. The Agreement explicitly required NFE to issue a bill of lading for each shipment, and stated that NFE agreed “to follow or perform” the shipper’s “instructions or specifications” contained in the bill of lading. For perishable produce specifically, the Agreement provided that NFE “shall comply with all of [C&A’s] and Shipper’s instructions as to temperature and transportation requirements, including, but not limited to continuous temperature setting.”
The court rejected NFE’s argument that the contract’s merger clause created ambiguity. The court found no conflict between the merger clause and incorporation by reference, reasoning that the merger clause bars incorporation of conflicting terms, but the bill of lading’s temperature instructions did not conflict with the Agreement’s terms—they implemented them. The plain language of the Agreement unambiguously demonstrated the parties’ intent to bind NFE to temperature instructions in bills of lading, and the continuous setting requirement was clearly a material term given NFE’s core obligation to deliver goods in good condition.
Because NFE admitted it failed to maintain the continuous temperature setting and this failure directly caused the strawberry shipment to be rejected, NFE breached a material term of the Agreement. The court therefore granted C&A’s motion for partial summary judgment and held NFE liable for the full value of the load.
Key Takeaways
- Incorporation by reference survives a merger clause when the signed agreement expressly contemplates and consents to incorporation of external documents.
- When a carrier agreement explicitly references adherence to bill-of-lading instructions for perishable goods, those instructions become binding contractual terms enforceable at summary judgment.
- A material failure to follow express temperature specifications in a perishable goods shipment constitutes breach of contract, even if the carrier frames the requirement as ambiguous.
- Under Texas law, the plain language of a contract controls its interpretation, and the court’s role is to determine whether ambiguity exists—not to create ambiguity where the language is clear.
Why It Matters
This decision clarifies broker-carrier relationships in the produce industry by confirming that temperature specifications in bills of lading are enforceable contractual obligations when the parties’ master agreement references them. NFE’s admission that it failed to use the continuous reefer setting—combined with the bill of lading’s express specification and the Agreement’s language binding carriers to shipper instructions—left no genuine dispute of material fact, making summary judgment appropriate. The ruling protects freight brokers like C&A who rely on carriers to follow explicit handling requirements and provides recourse when carriers breach those requirements.
The decision also reinforces that merger clauses do not automatically void incorporation by reference. Instead, incorporation remains valid when the signed agreement affirmatively references or consents to the incorporation of external terms. This principle prevents carriers from using merger clauses as a shield against compliance with industry-standard practice documents like bills of lading, provided those documents were clearly contemplated in the master agreement.