Bill of Lading

  1. is a receipt for goods either received (before shipment) or shipped on board.
  2. is good evidence of the existence and terms of a contract between the shipper and carrier. (A contract of carriage may exist without issue of a bill of lading, however.) A bill of lading is not a true contract, since it is usually signed by only one of the parties.
  3. is a document of title, signifying that the holder has the legal right to possession of the goods it describes. (The right to possession should not be confused with the right to ownership, which will usually be determined by the terms of the sales contract.)
  4. may, depending on how it is made out, be negotiable, i.e. transferable to a third party so as to effect transfer of title to the goods it describes.

The bill of lading as a receipt for goods

  1. The bill of lading’s prime function is as a receipt issued for:
  2. Goods received for shipment either by a carrier or a freight forwarder, etc. pending shipment on a vessel; or
  3. Goods shipped on board the carrying vessel,

depending on the wording or endorsements on the bill

  1. A bill of lading states the quantity and apparent order and condition of the goods when received into the carrier’s care and is normally printed with wording such as “Received in good order and condition unless otherwise stated…” or “shipped in good order and condition unless otherwise stated….”. If this statement is not true, appropriate remarks should be made on the face of the bill of lading. Any shortage or damage to the goods occurring before acceptance by the carrier should therefore be stated on the face of the bill of lading.
  2. If there is no causing of the bill of lading showing a defective condition or quantity of the goods on receipt by the carrier, the consignee may reasonably expect to receive his goods in good order and condition. Any loss or damage found on delivery will be assumed to be caused by the carrier’s negligence unless he can prove it to be attributable to one of the excepted perils listed in his contract of carriage (e.g. Act of God, inherent vice, etc.).
  3. Where a mate’s receipt is issued, the bill of lading’s description of the quantity/condition of the goods is copied from the description in the mate’s receipt. It is most important, therefore, that the mate’s receipt states the actual quantity/condition of the goods at the time of loading where this is other than “in good order or condition” or differs in quantity from that stated in the shipping note.

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