BILL OF LADING
DEFINITION
• A bill of lading is a receipt for goods placed
on board or to be placed on board a
vessel, signed by the person who
contracts to carry them or his agent, and is
the written evidence of the terms on which
the goods are to be carried for a specified
freight.
• when the goods are delivered into the
custody of the carrier, the first receipt
usually given is the dock receipt (if the
goods are received alongside in ship), or
the mate’s receipt (when the goods are
actually loaded on board.
• This receipt establishes the rough data
and is surrendered in exchange for the
more formal receipt i.e. the bill of lading.
Barclays v Customs (1963) 1 Ll. Rep at 88
“The contract for the carriage of goods by sea, which is
evidenced by a bill of lading, is a combined contract of
bailment and transportation under which the shipowner
undertakes to accept possession of the goods from the
shipper, to carry them to their contractual destination and
there to surrender possession of them to the person who,
under the terms of the contract, is entitled to obtain
possession of them from the shipowners. Such a
contract is not discharged by performance until the
shipowner has actually surrendered possession (that is,
has divested himself of all powers to control any physical
dealing in the goods) to the person entitled under the
terms of the contract to obtain possession of them.
So long as the contract is not discharged, the bill of
lading in my view, remains a document of title by
indorsement and delivery of which the rights of property
in the goods can be transferred.”
TYPES OF B/L
1. A ”Straight” Bill of Lading
 A “straight” bill of lading is one which is made out to a
named consignee. It is a non-negotiable and nontransferable document.
 It can be transferred from the shipper to the consignee
but it is not freely transferable between subsequent
holders by endorsement in the same way as the
traditional form of bill of lading.
2. The Sea Waybill
 Sea waybills offer a non-negotiable alternative to the bill of
lading. It is not used as a means of transferring title to goods.
 They are useful for companies that trade internationally with
themselves between geographical areas where payment for
exports is not a problem.
e.g. shipment from Tesco UK to Tesco Malaysia
 It does not have to be produced to obtain the goods.
 A freight forwarder might use them to control groupage cargo.
The sea waybill can thus be sent forward with the goods
allowing the consignee to take immediate delivery.
3. Negotiable B/L
 Goods shipped under a B/L may be made delivearble
to a named person or to a name left blank or ‘to order’
E.g. “TO ORDER” or “TO ORDER OF SHIPPER” or “TO ORDER
OF XYZ BANK”
 A negotiable bill of lading allows title to goods to be
transferred by endorsement and delivery.
 This facility gives one or other parties to the transaction
control over title to the goods.
 It can be used as a negotiable instrument for payments
Bills of lading for specific purposes
There are various ways in which the B/L is termed, for the
purpose of identifying the carrier’s responsibility for the carriage.
1. Port to port B/L (also known as Ocean Bill of Lading):
The carrier’s responsibility begins at the port of loading and ends
at the port of discharge.
2. Through B/L
 The "through" bill of lading concept allows door-to-door
shipments to be covered by a bill of lading.
 This became necessary
containerisation.
following
the
development
of
 Thus, this type of bill may cover ocean shipment, plus inland
transport by other modes, with the ocean carrier subcontracting
these other elements.
 It is suitable where the ocean carrier is remote from the place
of origin and/or a place of destination so that the cargo has to
be ‘fed’ to or from the loading/discharging port of the ocean
carrier, usually by a coaster or short-sea vessel.
• The difference between through B/L and combined B/L: in
through B/L, ocean carrier acts as agent for the pre/on
carrier(s). He undertakes to make arrangements and charges
a single through rate but his liability is only for the ocean
voyage. Claims arising through problems during pre/on
carriage have to be made to those parties
3. Combined Transport B/L
• Similar to a through bill of lading, the combined transport bill of
lading allows for the contract of carriage to be covered by a
single document.
• It clearly defines single set of conditions of carriage to include
the use of road and/or rail shipment at either end of the sea
leg.
• This document will, when issued, extend the carrier's liability
as set out in the combined transport bill of lading to the other
transport modes.
• Freight forwarders operating as non-vessel owning carriers
(NVOCS) will most usually issue this type of document
4. Stale bills of lading
• Bills of lading are said to be "stale" when they are presented
late to a consignee, for example after the goods have arrived
at the port of destination and have been unloaded from the
carrying vessel.
• Faced with the possibility of paying storage charges in quay
rent, the consignee may reject the bills of lading on the basis
that they are "stale".
5. A "clean" bill of lading
•
A B/L in which no notation is shown on the document relating
to cargo having been received by the line or shipped in any
other than good condition and correct quantity.
• Thus, standard printed bills of lading usually bear the wording
"Shipped (or received for shipment) in apparent good order
and condition"
6. Claused B/L
• In the case where the cargo is noted to be wet, damaged or in
doubtful condition or quantity, bills of lading will be issued
"claused" (or "dirty"), showing the defect in the cargo.
• If goods are shipped under a claused bill, consignees may
reject them or, alternatively, banks may not accept such bills of
lading for payment purposes.
FUNCTIONS OF B/L
1. Receipt for the Goods Shipped
• The bill of lading records the quantity and condition of
the cargo at the moment of receipt by the carrier.
– A “shipped on board” B/L records the
quantity/condition of the cargo at the moment that it
is received on board.
– A “received for shipment” B/L records the
quantity/condition at the moment the goods are
received into the carrier’s charge if this occurs
before actual shipment.
Hague/Visby Rules Art III r 3
3. After receiving the goods into his charge, the carrier, or the master or agent
of the carrier, shall, on demand of the shipper, issue to the shipper a bill of
lading showing among other things—
(a) the leading marks necessary for identification of the goods as the
same are furnished in writing by the shipper before the loading of
such goods starts, provided such marks are stamped or otherwise
shown clearly upon the goods if uncovered, or on the cases or
coverings in which such goods are contained, in such a manner as
should ordinarily remain legible until the end of the voyage;
(b) either the number of packages or prices, or the quantity, or weight,
as the case may be, as furnished in writing by the shipper;
(c) the apparent order and condition of the goods:
Provided that no carrier, master or agent of the carrier, shall be
bound to state or show in the bill of lading any marks, number,
quantity, or weight which he has reasonable ground for suspecting
not accurately to represent the goods actually received, or which he
has had no reasonable means of checking.
4. Such a bill of lading shall be prima facie evidence of the
receipt by the carrier of the goods as therein described in
accordance with paragraphs 3(a), (b) and (c).
1. Statement as to quantity
In the case of non-containerised cargo, this will usually
state the number of tonnes and/or the volume in cubic
metres also any identfying marks or numbers
2. Statement as to condition.
In most B/L, there is a printed phrase “ in apparent good
order and condition”
“If the cargo is received in apparent good order and
condition the ship must issue a clean B/L even if the
goods are damaged very shortly thereafter since the
B/L “speaks from the ship’s rail.”
“Galatia” (1980) 1 Ll. Rep 453
• It is also important to remember in the context of the sale
of the goods that the bill of lading merely records the
condition, quantity etc on shipment (i.e. loading) since
that is the moment when the risk normally passes from
the seller to the buyer.
• The date of the B/L should be that when the full quantity
stated on the B/L has been received by the carrier.
• The date is important either to satisfy cargo sale contract
requirements or because the price may be affected by
the bill of lading date.
“Wilomi Tanana” (1973) 2 Ll. Rep. 41
• A B/L which is dated before or after the full quantity has
been received (i.e. an “ante-dated” or “post-dated” B/L)
is a misrepresentation and possibly a fraud.
The importance of the data

Purchasers of goods and their financers and insurers
rely on the accuracy of the data.

Therefore, the master has a duty of care to such parties
to ensure that the data is accurate.

Inaccurate description of the data can make the carrier
liable for misrepresentation.



Whilst the bill of lading remains in the hands of the
shipper it is only prima facie (i.e. rebuttable) evidence of
the data which can be rebutted by other evidence such
as tallies etc.
However!
Once the bill has been transferred to a third party it
becomes conclusive evidence of the data recorded
on it even if it is not in fact a true record.
2. As an evidence of a contract of carriage
• In the hands of the shipper a bill of lading serves as
evidence of the contract of carriage though it contains
the terms of carriage.
•
The contract with the shipper is likely to have been
concluded orally long before the issue of the bill of
lading. The document may vary some of the agreed
terms or contains terms that have not been agreed to by
the parties
3. As a document of title.
• Transfer of the bill of lading by the seller to the buyer is
deemed to be symbolic delivery of the goods to the buyer
and the buyer, on the ship’s arrival could demand delivery
of the goods.
• The buyer can sell the goods on while they are at sea to
the third party by simply endorsing the bill of lading and
delivering it to the third party. The third party, by becoming
the holder, can demand delivery of the goods on arrival.
• Not all bills of lading, however, are transferable.
To impart transferability to a bill of lading, it must
be drafted as order bills
• The carrier is under an obligation to deliver the
cargo only against the original bill of lading if not,
then he will be liable in contract as well as in tort
to the bill of lading holder.