A bill of lading has commonly been said to have three characteristics :
1} a contract for the carriage of the goods
2} an acknowledgement of their receipt and
3} documentary evidence of title .
However, there is an uncertainty and dispute about its contractual nature.
The significance of the establishment of the contractual role of bills of lading based on the necessity that any contractual party should know the final terms of the contract upon which the terms of the International Conventions will be implied to. Contractual terms must not be different to these stated by the International Conventions. Is the bill of lading the contract of carriage upon which the terms of the International Conventions are implied to?
In this first article it is proposed to investigate the contractual role of bills of lading as it has been perceived in the different international conventions.
The analysis will be based mainly on arguments which have arisen from the content of the conventions themselves, than by investigating the national Acts which were introduced in order to implement the international conventions. Reference to other sources, such as court decisions or views of various scholars, will be made in case that there is a straight relation with the construe of the conventions themselves.
The main scope is to find out how the international practice is reflected in the writing of the conventions. This article will be the first of a series of articles which will follow and where their contractual role under the Creek, United States and English law will be investigated.
A bill of lading is also referred as BOL or B/L is a document that is issued by a carrier such as ship's master to acknowledge that specific products have been received for conveyance and delivery to the consignee. There are four types of bill of lading including Straight bill of lading, order bill of lading, bearer bill of lading and surrender bill of lading. Example of bill of lading is Southern Railway Company bill of lading (1906). It is considered very important in the international trade because in trade transportation of goods is carried out via sea therefore, the transport documents are prepared. Therefore, a bill of lading in international trade acts as an evidence of the contract of the transportation of goods by sea.
A bill of lading, is a receipt issued to shipper, in confirmation of receipt of goods apparently in good condition, by the freight forwarder/shipping company for the agreed dispatch.It's the proof or evidence of contract of carriage between shipper & freight forwarder/shipping company.A bill of lading hold title of goods, against which delivery can be claimed / demanded by the shipper/consignee at the agreed destination where the liner/forwarder is responsible to deliver the goods.
The most important document in shipping is the bill of lading signed by or on behalf of the transporter or the ship’s master. Originally called a bill of loading, it is used to certify that the Seller’s goods have been received for transportation and delivery as stipulated in bill of lading. A bill of lading fulfills at least three important functions in international transportation trade:
(1) it is a receipt of goods indicating in what apparent order and conditions the goods have been received on board;
(2) it is a contract between the Seller (Shipper) and the shipping company (the Carrier) for the performance services of transportation of the covered goods from the port of loading to stipulated port of destination; and
(3) it is also an evidence of ownership of the goods described and allows the legal owner of the bill of lading to transfer the goods at any time to any relevant party, for the owner of the bill of lading is also the owner of the goods. So when made out “to order”, the bill of lading becomes in practice a negotiable instrument and is often used as security for loans and other purpose.
With the rapid development of international trade, transportation facilities have been greatly improved to meet the demand. To meet with the improvement, bill of lading serving different method of transportation appeared. There are Ocean Bill of Lading (for shipment over an ocean), Air Waybill (through the use of an airplane), Inland Bill of Lading (for inland surface transportation), and Intermodal Bill of Lading. No matter how it is titled, a bill of lading is to convey ownership of the goods and to govern their transportation, but an air waybill is neither a document of title nor can it transfer ownership of the goods to which it refers.
Electronic bills of lading
To provide a solution to legal requirements of any national or local law, custom or practice requiring the contract of carriage to be evidenced in writing and signed, the Committee Maritime International (CMI) has adopted Rules for Electronic Bills of Lading (1990). Under the Rules, upon receipt goods, the carrier can send an electronic message to the shipper describing the goods, the contract terms and a “private key or code”. The private key or code can be used to transfer shipper’s rights to a third party. And the third party then becomes a new holder. The carrier then cancels the original key and gives a new key to the new person entitled to control of the goods. In this way the key holder should have the same rights as the bill of lading holder.
Bill of lading
A bill of lading (sometimes referred to as a BOL,or B/L) is a document issued by a HYPERLINK "http://en.wikipedia.org/wiki/Common_carrier" \o "Common carrier" carrier to a shipper, acknowledging that specified HYPERLINK "http://en.wikipedia.org/wiki/Good_(accounting)" \o "Good (accounting)" goods have been received on board as cargo for HYPERLINK "http://en.wikipedia.org/wiki/Conveyance" \o "Conveyance" conveyance to a named place for delivery to the HYPERLINK "http://en.wikipedia.org/wiki/Consignee" \o "Consignee" consignee who is usually identified. A through bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea. The term derives from the verb "to lade" which means to load a cargo onto a ship or other form of transport.
A bill of lading can be used as a traded object. The standard short form bill of lading is evidence of the HYPERLINK "http://en.wikipedia.org/wiki/Contract" \o "Contract" contract of carriage of goods and it serves a number of purposes:
It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i.e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement intégral) issued by the carrier sets out all the terms of the contract of carriage);
It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport); and
It is also a document of transfer, being freely transferable but not a HYPERLINK "http://en.wikipedia.org/wiki/Negotiable_instrument" \o "Negotiable instrument" negotiable instrument in the legal sense, i.e. it governs all the legal aspects of physical carriage, and, like a HYPERLINK "http://en.wikipedia.org/wiki/Cheque" \o "Cheque" cheque or other negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried. This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx for mostly airway parcels, is separate from any contract for the sale of the goods to be carried, however it binds the carrier to its terms, irrespectively of who the actual holder of the B/L, and owner of the goods, may be at a specific moment.
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=1" \o "Edit section: Main types of bill" edit] Main types of bil
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=2" \o "Edit section: Straight bill of lading" edit] Straight bill of lading
This bill states that the goods are consigned to a specified person and it is not negotiable free from existing equities, i.e. any endorsee acquires no better rights than those held by the endorser. So, for example, if the carrier or another holds a HYPERLINK "http://en.wikipedia.org/wiki/Lien" \o "Lien" lien over the goods as security for unpaid debts, the endorsee is bound by the lien. Although, if the endorser wrongfully failed to disclose the charge, the endorsee will have a right to claim HYPERLINK "http://en.wikipedia.org/wiki/Damages" \o "Damages" damages for failing to transfer an unencumbered title.
Also known as a non-negotiable bill of lading; and from the banker's point of view this type of bill of lading is not safe.
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=3" \o "Edit section: Order bill of lading" edit] Order bill of lading
This bill uses express words to make the bill negotiable, e.g. it states that delivery is to be made to the further order of the consignee using words such as "delivery to A Ltd. or to order or assigns". Consequently, it can be endorsed by A Ltd. or the right to take delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of A Ltd.'s intention to transfer.
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=4" \o "Edit section: Bearer bill of lading" edit] Bearer bill of lading
This bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery.
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=5" \o "Edit section: Surrender bill of lading" edit] Surrender bill of lading
Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading (SBL), i.e. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods.(" HYPERLINK "http://ww2.westpac.com.au/documents/pdf/wibnz/guide-to-trade-terms-payables" Guide to Trade Terms" (PDF). p. 64. HYPERLINK "http://ww2.westpac.com.au/documents/pdf/wibnz/guide-to-trade-terms-payables" http://ww2.westpac.com.au/documents/pdf/wibnz/guide-to-trade-terms-payables. Retrieved 2007-12-13. )
[ HYPERLINK "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&action=edit§ion=6" \o "Edit section: Other terminology" edit] Other terminology
A sea or air HYPERLINK "http://en.wikipedia.org/wiki/Waybill" \o "Waybill" waybill is a no