Bill of Lading
Short Overview
Bills of lading have been known from at least the thirteenth century. At that times shippers (usually the owners of the goods) as a rule accompanied their cargoes on the voyage to destination and bill of lading served only as an invoice of the goods shipped. Later, in the sixteenth and seventeenth centuries, when larger ships has begun to carry varied cargoes belonging to several shippers this practice gradually came to naught and it became the custom to incorporate the terms of the contract of carriage into bill of lading. Finally to meet requirements of businessmen who wished to sell the goods before the vessel reached its destination bill of lading extended its status to a document of title. Thus at the end of the eighteenth century bill of lading was characterised as:
… the written evidence of a contract of the carriage and delivery of goods sent by sea for a certain freight. The contract in legal language is a contract of bailment; 2 Lord Raym. 912. In the usual form of the contract the undertaikng is to deliver to the order or assigns of the shipper. By the delivery on board, the ship-master acquires a special property to support that possession which he holds in the right of another, and to enable him to perform his undertaking. The general property remains with the shipper of the goods until he has disposed of it by some act sufficient in law to transfer property. The indorsement of the bill of lading is simply a direction of the delivery of the goods. When this indorsement is in blank, the holder of the bill of lading may receive the goods, and his receipt will discharge the ship-master; but the holder of the bill, if it came into his hands casually, without any just title, can acquire no property in the goods.
At that times carriage of goods by sea was in bigger part performed by the common carriers who agrees to carry the goods of any person who choose to employ him. A common carrier was strictly liable to the goods’ owner in the same way as a bailee for reward, i.e. was to deliver the goods at all events, subject only to the acts of God and the King’s enemies.
With the rapid growth of international trade and significant influence on the development of contract law of laissez-faire ideology in the first half of the nineteenth century the shipowners were able to took advantage of their superior bargaining power by introducing clauses into the contract of carriage which, to an increasing degree, excluded their common law liability. Thus the shipowners to the bigger or smaller extent lost characteristics of a common carrier and became private carriers.
Statutory Developments
Such unrestricted application of the doctrine of freedom of contract to the bills of lading contracts was vigorously opposed by other involved sides, namely shippers, bankers and underwriters. Finally it led to understanding that there is no practical value in any piecemeal solution, but only internationally recognised agreement can be acceptable for all parties. Such agreement in form of a set of rules was drafted by the Maritime Law Committee of the International Law Association and in 1921 and formed an international convention which was signed in Brussels on 25 August 1924 by the major trading nations, also known as the Hague Rules.
It shall be said here, that the Hague Rules were not intended to provide a comprehensive and self-sufficient code, but were designed merely to define the basic obligations of the carrier, therefore over the years all the limitations of the Rules became a source of discontent within shipping society which brought in 1968 to incorporation of amendments to the Rules, known as the Brussels Protocol and revised Rules became to be known as the Hague/Visby Rules.
Under influence of developing countries, negotiations began at UNCITRA in 1968, resulted in the signing of a document in 1978 in Hamburg and since then known as the Hambur Rules. Development and analysis of the Hamburg Rules are beyond the scope of this overview and it is sufficient only to note that the Hamburg Rules being ratified by a number of states which have neither ships, ports nor international trade, were never broadly adopted by the world’s major trading nations.
For the latest effort of UNCITRAL on modernisation of the legal regime governing international transport see the Rotterdam Rules.
| Next: Date and Cargo Quantity Statements
Leave your questions and comments here
Although author encourages visitors to leave their comments using this form, but should you be unable or unwilling to use it for any reason you can mail to info@lawandsea.net to contact with him.