International Trade Law Assignment on Bill of lading.

Assignment-02.

A bill of lading is a receipt, evidence of contract of carriage a document of title depending on whether the holder of the bill of leading is the shipper, consignee, and endorsee-Explain.

Introduction.

A bill of lading is a type of document/receipt issued by the ship-owner or by the master, captain of the ship or other agent after the goods have been placed on board for being carried to a specific destination. The term derives from the noun “bill”, a schedule of costs for services supplied or to be supplied, and from the verb “to lade” which means to load a cargo onto a ship or other form of transport. Although bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea.

A bill of lading is used when the goods shipped from only a part of the cargo of a general ship. It must be stamped and signed by ship-owner or his agent. [The An Jang (2003) 45 SLR 348].

 There are two basic types of bill of lading.

  1. The straight bill.

  2. The order bill.

A straight bill of lading is a non-negotiable document, made out to a specifically named consignee, from which the shipping company acknowledges receipt of the freight and agrees to move it to its destination.

An Order bill of lading is a document that is made out to the order of the foreign importer or its bank, or the order of the export firm, its bank, or another designated party.

The bill of lading must contain the following information.

• Name of the shipping company

• Flag of nationality

• Shipper's name

• Order and notify party

• Description of Goods

• Gross/net/tare weight,and

• Freight rate/Measurements and total freight of goods.

Rules governing Bills of Lading.

There are several major international legal regulatory frameworks governing Bills of Lading, including-

The Hague Rules, 1924 and The Hague-Visibly Rules and The Hamburg Rules, 1978.With respect to the regulatory frameworks, Bills of Lading facilitate international trade by specifying the regulatory framework governing the particular transaction. Indeed, for a particular regulatory framework to be enforceable over a Bill of Lading, it has to be incorporated by the Bill of Lading through the General Paramount Clause. The General Paramount Clause may also specify the period during which the goods will be covered by the specified rules.

Additionally, the Bill of Lading will normally state the particular goods within the consignment that are covered by a particular set of rules.

Hence, bills of lading play a very important part in international trade. Depending upon the rules, which are followed, there are different implications for different parties, which are involved. This assignment gives specific description of the nature and functions of the bill of lading.

A bill of lading is a contract of carriage of goods.

A bill of lading is not merely a contract of carriage of goods but also a receipt and a document of title as well. The bill of lading is a commercial document. Moreover, bills of lading are the classic contract of carriage of goods. While charter parties are the classic contract of hire of a ship and so the bill of lading is a contract in respect to the goods.

Contract of carriage' covered by a bill of lading or any similar document of title, so such document relates to the carriage of goods by sea, including any bill of lading. Such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

The bill of lading has three characteristics:

(1) Receipt for the goods shipped.
(2) Evidence of the terms of the contract of affreightment.
(3) Document of title to the goods specified in the Bill of Lading.

Contract of carriage' applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

The Receipt Function.

The receipt function of the Bill of Lading is governed by Article III Rule 3 of the Hague Rules. Which indicate the identification of the shipped goods, the number of packages, pieces, quantity, or weight of the goods shipped, and the apparent order or condition of the goods at the time of loading.

The receipt function of a Bill of Lading therefore is evidenced by the document itself since information as to the nature and quantity of goods, and the port and time of receipt of goods is stated in designated fields.

In Grant v Norway case emphasized that the signature on the Bill of Lading by the ship’s master, affirming that he has received the goods is what makes the Bill of Lading an official receipt.

Evidence of Contract of Carriage Function.

It is evidence about a valid contract of carriage of goods by sea. A bill of lading is itself a piece of paper which create relation between the carrier and shipper, whereas carrier issued it to the shipper through this paper it make the ground of acknowledge about the particular goods which have been received as cargo. A charter party normally lays down the terms and conditions of carriage, including specifying the vessel that shall ferry the goods, the ports of loading and unloading, and mode of payment, a description of the goods to be ferried. The charter party is a separate contract from the sale contact between the buyer and the seller of goods. This proof is provided by the Bill of Lading.

A bill of lading can be considered as a trade purposes. In short the bill of lading is evidence of the contract of carriage of goods. So, it is not a contract but it is only evidence of the contract. Essentially, the transfer of a Bill of Lading imposes rights and liabilities on the subsequent holder vis-a-vis the carrier.

Bill of lading is a  document of title.

The bill of lading is a typical document of title. The bill of lading is invested with particular attributes of great practical importance commercially. This enables it to become one of the key instruments in international trade. A document of title to goods is a written document which proves that the person indicated therein as the owner of goods has title to them, and which when transferred from the indicated owner of the goods to another party, transfers title to those goods to that other party, even though the goods may not be in the physical possession of the original owner.

A Bill of Lading is considered by merchant custom as a document of title to goods specified therein. The passage of title to goods specified in a Bill of Lading is customarily done by endorsement. Endorsement enables title to the specified goods to pass even though the goods are in transit. As such, the endorsee is entitled to claim the goods once the ship carrying them docks at the port of discharge.

Endorsement of bill of lading.

The consignee as mentioned in the Bill of Lading and the actual receiver of the goods may vary under the conditions in which the Bill of Lading has been or intended to be, negotiated. Thus the goods contained in the Bill of Lading may be consigned to:

(1) A named person or firm.
(2) A named person or firm or to an order or assign.
(3) To Bearer.

Rights under bills of lading to vest in consignee or endorsee.

Every consignee in a bill of lading, and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, and such consignment or endorsement shall have transferred  and vested him all rights of suit. 

Nothing shall prejudice or affect any right of stoppage in transit, or any liability of the consignee or endorsee. Bill of lading in hands of consignee is conclusive evidence of the shipment as against master, etc. Every bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same.

Conclusion.

A Bill of Lading has various roles as noted in the discourse above. Its role as evidence of the existence of a contract of carriage ensures that subsequent endorsees of the Bill of Lading, vis-a-vis carriers are bound by provisions of the contract of carriage, and derive rights and liabilities there from, with respect to each other.

The receipt function of a Bill of Lading is important as it provides proof that the carrier received the goods as set out in the Bill of Lading, while its document of title function plays an important role especially with respect to commercial credits and financing.

Whenever anyone is dealing with a Bill of Lading, attention should be drawn to the Governing Rules applicable to it. These are found in the Paramount Clause of the Bill of Lading and often govern various issues including duties and liabilities of parties.

Bibliography.

Books

1. Yaroslavna Lasytsya: Rules of Bills of Lading in International Seaborne Trade (2005/2006).

2. The Law and Practice of International Trade. (11th edition).

3. The Hague Rules as amended by the Brussels Protocol, 1968

4. Journal Articles-http:// lawcare87.blogspot.com

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