Introduction
It would not be simple for the ship’s owner to override the effects of the bill of lading. The carrier issues the docket as proof that the items were received following the details stated in the export shipping legal instrument. The exporter packs the products in his home, labels them, weighs them, and then goes to the customs station to export them. In this case, the transporter does not consider and examine the products. Although the cargo’s weight is unknown to the carrier, it is stated on the carrier-issued Bill of Lading. Based on the shipper’s declaration of the information in the shipping bill’s “let export order,” the report is stated in the invoice (Choi, 2018). However, as the carrier does not know the accurate weight of the goods, he cannot be held liable if a claim develops due to an incorrect weight statement. The shipper is, therefore, accountable for any inaccurate weight statement.
Analysis of Bill of Lading
Transporting a freight consignment necessitates using a bill of lading (BOL). It functions as a freight service receipt and a contract between the shipper and the freight carrier, who may also be the same person (Stevens, The bill of lading, 2017). As a result, the BOL is a binding legal document that gives the carrier and the driver the information they need to handle the product and adequately bill it before shipping. It should contain the point of pick-reference-up number, the purchase orders, and the shipper’s and receiver’s names and addresses. These characteristics significantly impact the cost of shipping, and valuation is performed based on them to assess the cost of shipment because the cost of transport varies depending on the kind of commodities (Stevens, Function of bill of lading, 2017). The BOL also positions the carrier to assume responsibility for the products; as a result, they are held accountable for any loss, damage, delay, and transportation of the items until delivery.
The bill of lading was first widely used by merchants in Spain, England, and other European countries in the sixteenth century. It placed greater emphasis on the quantity and kind of the goods than on the commodities’ description or condition. A more detailed docket and terms restricting the carrier’s legal liability for damage to the goods caused by maritime hazards were adopted by carriers (Baskind et al., 2022). Therefore, the issue of who assumes the risk of damage to goods in transit and the degree of liability for misrepresentations made by the consignee in the docket became essential in the common law. As a result, merchants created guidelines and norms for bills of lading. The Marine Ordinances of Louis XIV, which held shipmasters accountable for delivering the consignments in line with the waybill, were among the first of these regulations.
These regulations further restricted the freedom of carriers to choose which sections to include in the invoices by requiring them to contain phrases guaranteeing the amount, quality, and mark of the products. In contrast to the basic standard of the materials used to construct a ship, the term “status” refers to the perceived constitution seen on the goods’ faces. It is because ship captains cannot evaluate the actual state of the cargo they are transporting (Jessen, 2020). As a result, it became commonplace for masters to insert sections stating that the assertions made in a bill of lading were consistent with statements the consignor of the goods made to the carrier. The carrier might be held accountable if the quantity and quality of these commodities fall short of what was promised.
Discussion of the Bill of Lading’s Evidentiary vs. Contractual Nature in US Law
The value of a bill of lading has been debated for more than 100 years in Europe and the UK. German American Savings Bank v. Craig (1903) was the case that first raised this topic for consideration in the US. The question was also introduced in England, which was part of the 1856 Verderwater v Mills ruling (Carr &Stone, 2017). In this illustrious case, the terms of an agreement were thoroughly discussed, and it was decided that they should be described as part of a new contract. A bill of lading outlines the contents of the agreement without mentioning the existence of any previous agreements or other agreements to which it is meant to refer.
The US Supreme Court determined that customs and usage could not alter the conditions of a bill of lading in 1856. In contrast to the traditions and use that were the focus of the discussion, these expressions had a whole legal meaning. The court sided with the insurance companies in Garrison v. The Memphis Insurance Company (1856. Before the rights and responsibilities of the parties to a dispute could be established, it was decided that the contractual relationship’s clarity was necessary.
In the absence of additional express contracts or other agreements, it was crucial to determine if the written document that served as a bill of lading had any contractual duties. In the US legal system, the statement of lading identifies its contractual purpose.. This result is supported by a different judgment in which the court declined to consider the substance of the bill when applying the doctrine of parol evidence.
It was examined in this case whether issuing a bill of lading before the actual shipment boarding had any repercussions and if verbal variations may influence the parties’ written rights and responsibilities. It was concluded that the results would be the same whether a bill of lading was issued before the shipment left the dock or while the items were still on the pier. Regarding the second issue, the court determined that the ordinary statement of lading’s stated terms had the legal force of a contract, defining the parties’ respective rights and obligations (Rogers et al., 2022). Therefore, there was no room for disagreement with the verbal claims or pledges. According to the law, all agreement terms between the parties are evidenced, but it goes beyond actual contract proof. Therefore, the parol evidence was determined to be inadmissible against the exclusiveness of the bill of lading, and it was determined that it constituted a contract for the carriage of goods.
Maritime International Laws
In the marine industry, the bill of lading is essential since it acts as a contract for the transportation of goods between the consignor, carrier, and consignee. The regulations governing the responsibility for goods under shipment in international trade must thus be harmonized and applied consistently since the bill acts as a transactional link between parties doing business in different nations (Sawiczewska, 2017).
The division of responsibility in international business transactions is often defined by the contract of sale signed by the buyer and seller. The risk associated with commodities outside the contract is regulated by law; the sale of Commodities Act of 1979 introduced rules governing the transfer of property in things. The Sale of Products Act states that when the seller gains ownership of the products, the risk of loss or damage to the product passes from the buyer to the seller (Moura & Botter, 2020). According to Section 16 of the Act, ownership of unascertained items can only be transferred to the buyer when they are identified (Jian et al., 2019). Therefore, under these circumstances, when the items contract, ownership and risk of the said goods stay with the seller.
However, any agreement between the parties regarding the transfer of risk and property is subject to this stance. As a result, parties actively attempted to change their obligations by favoring various commercial arrangements. As a result, several contracts were created between buyers and sellers to define each party’s obligations if the items were damaged or lost and allocate responsibility for the goods’ insurance to each party. For example, the Cost, Insurance, and Freight (CIF) agreement compelled the seller to bear the cost of shipping the goods and get insurance (Power, 2018). To comply with the CIF, the buyer must obtain a valid, negotiable bill of lading, a statement, and an insurance certificate. Once the buyer files the necessary CIF agreement documentation and meets the purchase price criteria, ownership and risk of the consigned items pass to the buyer.
On the other hand, accessible Board (FOB) arrangements transfer ownership of the goods to the buyer after they are placed on the ship. The customer then takes on the responsibility for paying the freight, marine insurance, and additional costs like import customs and storage fees. Similar to previous contracts, after the items pass the ship’s rail, the buyer is in charge of them. The carrier of goods may not decline to accept delivery of the goods when a bill of lading is given to a third party, according to Section III(4) of The Provisions (Stephen, 2022). Due to the low ratification rate, significant maritime businesses declined to ratify the treaty. The Convention on the Carriage of Goods by Sea could not accomplish its intended goals. On December 11, 2008, the UN General Assembly approved the Rotterdam Declaration of Principles on the International Carriage of Goods Wholly or Partially by Sea.
Individual Stance on the Discussion
The bill of lading has been taken as proof of the terms of an existing carriage contract between parties. It results from the shipment being loaded onto a ship following a current agreement for transporting commodities. As a result, a carrier cannot offer any other evidence to challenge the specifics of the transport contract as specified in the docket. This stance was upheld in the Leduc v. Ward decision from 1888, where the court ruled out that things sent could not exactly match what was stated on the docket (Politakis, 2018). The court upheld the essential character of the way bill as a receipt specifying the number of products on board in its ruling in the Libau Wood Co. v. H. Smith & Sons Ltd case. According to the Court of Appeal, a waybill must match the number of commodities described in the docket (Kazara-Belja, 2020). In addition, the court ruled that an invoice must correspond to the statement on which the buyer’s products are listed.
Ship Owner and Clausing of the Bill Of Lading
Even while the goods are in transit, the bill of lading’s owner may assign the ownership to a different party. This element emphasizes the vital quality of the waybill as proof of title to the shipment. The products are delivered to the endorsee through the docket, which also serves as an endorsement. Before the property in the products reaches its destination, it goes through the approval, delivery, and re-enactment steps. An order bill written out to a specific consignee or his assigns is known as a “straight bill” and is no longer transferable (Stevens, Bill of lading clauses, 2017). Both types of waybill function initially as papers of title, but only order bills are transferrable.
Conclusion
Eliminating the impact of statements in the bill of lading is difficult for a ship-owner. The effectiveness and functions of the bill of lading in shipping commodities by sea have been assessed. The procedure has shown that the bill of lading performs several duties, including serving as a receipt for the delivered goods and a record of the carriage agreement that governs that shipment of goods. The document has historically done a variety of functions for shippers and carriers engaged in maritime transportation. Its current status has changed over time, been accepted by commercial customs, and been given legal validity by decisions rendered by various courts during the same period.
In the modern era, when its primary purpose is to serve as a receipt and complete confirmation of delivery of commodities on a ship, it serves as both a record of title and evidence of the parties’ contractual and legal relationships. In addition, it serves as the fundamental legal instrument outlining the rights and obligations of the carriers. Among all these characteristics and purposes, its primary role as a document of titles—precisely, its capacity to enable the transfer of commodities in transit—is crucial.
Reference List
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