i) As Evidence the Contract of Carriage
Shipper and the carrier, or their agents, enter into an agreement as a contract of carriage before the goods are shipped, often when the shipper books space on the ship for his goods, or perhaps on loading of the goods or acceptance for loading by the carrier. (heskell 1950) As we see here, the contract of carriage is completed before issued a bill of lading. Additionally, the carrier is not entitled to establish new terms after he received the goods.
Where the terms contained in the bill of lading do not reflect the terms agreed orally, evidence regarding the oral agreement may be submitted by the shipper. (172-carr) This argument can be found in case of The Ardennes**. Hereby the goods were mandarin oranges to be shipped from Spain to England. Before the contract of carriage was concluded the shipowners promised the shippers orally that they would arrive in London by November 30, but they did not actually arrive until December 5. The arrival date was important to shipper because import duty was imposed from December 1 and a clause in the bill of lading allowed the shipowners to deviate on the voyage, and the shipowners pleaded that in defense. Lord Goddard LJ clearly acknowledged in his judgment that ‘a bill of lading is not, in itself, the contract between the shipowner and the shipper of the goods, though is has been said to be excellent evidence of its terms . . . the contract has come into existence long before the bill of lading is signed.’(The Ardennes )**
According to Lush J in Crooks v Allan** “… a bill of lading is not the contract, but only evidence of the contract; and it does not follow that a person who accepts the bill of lading which the shipowner hands him necessarily, and without regard to circumstances, bind himself to abide by all its stipulations. If a shipper of goods is not aware when he ships them, or is not informed in the course of the shipment, that the bill of lading which will be tendered to him will contain such a clause, he has a right to suppose that his goods are received on the usual terms, and to require a bill of lading which shall express those terms.”
On the other hand, when the bill of lading transferred or indorsed to a third party, the bill of lading is not as simply the evidence of the contract of carriage, the bill of lading becomes a conclusive evidence (222-chu) The case of Leduc & Co v Ward**provide the argument which have mentioned above that does not allow to argue the terms agreed on contract of carriage between the carrier and a third party.
ii) As a Receipt for the Goods
The bill of lading being a receipt for (a) the quantity of goods received, (b) the condition of goods received and (c) leading marks necessary to identify the goods. (167-carr) All these features is really important for the international sales contracts such as c.i.f. for instance the buyer have a chance to compare the quantities which are shown in the bill of lading with the sale contract. If the goods’ description does not follow the sale contract or commercial invoice, the buyer has a right to reject the goods.
Also the details that should take part in a bill of lading are stated in Art III rule 3 of The Hague-Visby Rules** in this way:
‘’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 pieces, 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.’’
A clean bill of lading is when the goods were received by the carrier in good condition after a making a superficial examination of the goods, this statement plays very important role because it is essential evidence for the buyer or the third party that shipper shipped the goods in a good condition. (214-chu) Relating with this in Bradley v Sons case stated that ‘what she receives as she received it, unless relieved by the accepted perils.’** Being said that the carrier is responsible for damage or lost on the goods while in transit, in another words carrier’s duty to deliver the goods how he received them.
On the other hand, if the shipper has to intent to sell the goods when they are in transit in case there is no current buyer, this document will provide the existence of the goods and information about the goods for the purchaser. (244-ox) This opportunity gives to the buyer a great advantage in the nature of business.
iii) As a Document of Title
Another function of the bill of lading as a document of title is the most important function when comparing with other two functions. Since tendered of the bill of lading is regarded as good as possessing the goods, the buyer can resell the goods to the third party when the goods are in transit at high seas by only endorsing the bill of lading and delivering it to the third party, thus the third party can demand delivery of the goods when they arrive at the destination port. (173-carr) From the legal point of view, we can say a bill of lading is a symbol of the goods. (333-sch) It has been illuminated by Bowen LJ in Sanders Bros v Maclean*:
‘’The law as to the indorsement of bills of lading is a clear as in my opinion the practice of all European merchants is thoroughly understood. A cargo at sea, while in the hands of the carrier, is necessarily incapable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognized as its symbol; and the endorsement and delivery of the bill of lading operates as a symbolical delivery of the cargo. Property in the goods passes by such endorsement and delivery of the bill of lading whenever it is the intention of the parties that the property should pass, just as under similar circumstances the property would pass by and actual delivery of the goods. It is a key which in the hands of the rightful owner is intended to unlock the door of the warehouse, floating or fixed, in which the goods may chance to be.’’
On the other hand, not all of bill of ladings are transferable such as ‘’straight consigned bills’’ which is only the named consignee can demand the goods at the port of destination and usually this kind of bills are practical when the shipper is shipping goods to himself or where the shipper has no purpose to resell the goods when they are in transit. (245-ox) In spite of this if the shipper intends to sell the goods when they are at he high seas, a bill of lading must be drafted as an ‘’order bills’’ where the carrier agrees to deliver the goods to a named consignee or to his order or assigns, in order to include transferability to the bill of lading. (174-carr) Lastly, possess of bill of lading does not mean possess of the goods all the time, property passes by tender of bill of lading depends on the intention of the parties according to Sale of Goods Act 1979, s.17:
‘’ (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.’’**
Shipper and the carrier, or their agents, enter into an agreement as a contract of carriage before the goods are shipped, often when the shipper books space on the ship for his goods, or perhaps on loading of the goods or acceptance for loading by the carrier. (heskell 1950) As we see here, the contract of carriage is completed before issued a bill of lading. Additionally, the carrier is not entitled to establish new terms after he received the goods.
Where the terms contained in the bill of lading do not reflect the terms agreed orally, evidence regarding the oral agreement may be submitted by the shipper. (172-carr) This argument can be found in case of The Ardennes**. Hereby the goods were mandarin oranges to be shipped from Spain to England. Before the contract of carriage was concluded the shipowners promised the shippers orally that they would arrive in London by November 30, but they did not actually arrive until December 5. The arrival date was important to shipper because import duty was imposed from December 1 and a clause in the bill of lading allowed the shipowners to deviate on the voyage, and the shipowners pleaded that in defense. Lord Goddard LJ clearly acknowledged in his judgment that ‘a bill of lading is not, in itself, the contract between the shipowner and the shipper of the goods, though is has been said to be excellent evidence of its terms . . . the contract has come into existence long before the bill of lading is signed.’(The Ardennes )**
According to Lush J in Crooks v Allan** “… a bill of lading is not the contract, but only evidence of the contract; and it does not follow that a person who accepts the bill of lading which the shipowner hands him necessarily, and without regard to circumstances, bind himself to abide by all its stipulations. If a shipper of goods is not aware when he ships them, or is not informed in the course of the shipment, that the bill of lading which will be tendered to him will contain such a clause, he has a right to suppose that his goods are received on the usual terms, and to require a bill of lading which shall express those terms.”
On the other hand, when the bill of lading transferred or indorsed to a third party, the bill of lading is not as simply the evidence of the contract of carriage, the bill of lading becomes a conclusive evidence (222-chu) The case of Leduc & Co v Ward**provide the argument which have mentioned above that does not allow to argue the terms agreed on contract of carriage between the carrier and a third party.
ii) As a Receipt for the Goods
The bill of lading being a receipt for (a) the quantity of goods received, (b) the condition of goods received and (c) leading marks necessary to identify the goods. (167-carr) All these features is really important for the international sales contracts such as c.i.f. for instance the buyer have a chance to compare the quantities which are shown in the bill of lading with the sale contract. If the goods’ description does not follow the sale contract or commercial invoice, the buyer has a right to reject the goods.
Also the details that should take part in a bill of lading are stated in Art III rule 3 of The Hague-Visby Rules** in this way:
‘’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 pieces, 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.’’
A clean bill of lading is when the goods were received by the carrier in good condition after a making a superficial examination of the goods, this statement plays very important role because it is essential evidence for the buyer or the third party that shipper shipped the goods in a good condition. (214-chu) Relating with this in Bradley v Sons case stated that ‘what she receives as she received it, unless relieved by the accepted perils.’** Being said that the carrier is responsible for damage or lost on the goods while in transit, in another words carrier’s duty to deliver the goods how he received them.
On the other hand, if the shipper has to intent to sell the goods when they are in transit in case there is no current buyer, this document will provide the existence of the goods and information about the goods for the purchaser. (244-ox) This opportunity gives to the buyer a great advantage in the nature of business.
iii) As a Document of Title
Another function of the bill of lading as a document of title is the most important function when comparing with other two functions. Since tendered of the bill of lading is regarded as good as possessing the goods, the buyer can resell the goods to the third party when the goods are in transit at high seas by only endorsing the bill of lading and delivering it to the third party, thus the third party can demand delivery of the goods when they arrive at the destination port. (173-carr) From the legal point of view, we can say a bill of lading is a symbol of the goods. (333-sch) It has been illuminated by Bowen LJ in Sanders Bros v Maclean*:
‘’The law as to the indorsement of bills of lading is a clear as in my opinion the practice of all European merchants is thoroughly understood. A cargo at sea, while in the hands of the carrier, is necessarily incapable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognized as its symbol; and the endorsement and delivery of the bill of lading operates as a symbolical delivery of the cargo. Property in the goods passes by such endorsement and delivery of the bill of lading whenever it is the intention of the parties that the property should pass, just as under similar circumstances the property would pass by and actual delivery of the goods. It is a key which in the hands of the rightful owner is intended to unlock the door of the warehouse, floating or fixed, in which the goods may chance to be.’’
On the other hand, not all of bill of ladings are transferable such as ‘’straight consigned bills’’ which is only the named consignee can demand the goods at the port of destination and usually this kind of bills are practical when the shipper is shipping goods to himself or where the shipper has no purpose to resell the goods when they are in transit. (245-ox) In spite of this if the shipper intends to sell the goods when they are at he high seas, a bill of lading must be drafted as an ‘’order bills’’ where the carrier agrees to deliver the goods to a named consignee or to his order or assigns, in order to include transferability to the bill of lading. (174-carr) Lastly, possess of bill of lading does not mean possess of the goods all the time, property passes by tender of bill of lading depends on the intention of the parties according to Sale of Goods Act 1979, s.17:
‘’ (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.’’**