Bil Of Lading

Question 1

Principle: A bill of lading is evidence of the contract of carriage and its terms must be fulfilled by the carrier.

Answer 1

Compania Naviera Vascongada v Churchill [1906] 1 KB 237
• Facts: A dispute arose from the non-delivery of goods under a bill of lading.
• Issue: Whether the carrier was liable for not delivering the goods as specified.
• Holding: The court held the carrier liable for breach of contract as the goods were not delivered as agreed.

Question 2

Principle: A bill of lading is prima facie (not conclusive) evidence of shipment between the shipper and carrier.

Answer 2

Parsons v New Zealand Co. [1901] 1 QB 548
• Facts: Bill of lading was issued for goods shipped, but not all goods were actually loaded.
• Issue: Whether the bill of lading was conclusive evidence of shipment.
• Holding: The court held that the bill of lading was not conclusive evidence and could be rebutted by proof.

Question 3

Principle: A bill of lading is a contractual document, and parol (oral) evidence cannot vary its terms.

Answer 3

Leduc v Ward (1888) 20 QBD 475
• Facts: Goods were carried on a route not mentioned in the bill of lading and were lost.
• Issue: Whether extrinsic evidence could vary the terms of the bill of lading.
• Holding: The court held that the bill of lading terms were binding and could not be altered by oral agreements.

Question 4

Principle: Bills of lading are documents of title and can transfer ownership by endorsement and delivery.

Answer 4

Sanders v Maclean (1883) 11 QBD 327
• Facts: A dispute over whether the bill of lading transferred property in the goods.
• Issue: Whether the bill of lading transferred constructive possession and title.
• Holding: Yes, the transfer of a bill of lading confers constructive possession.

Question 5

Principle: Where the bill is not the exclusive contract document (e.g., issued after shipment), oral terms may supplement or vary it.

Answer 5

The Ardennes [1951] 1 KB 55
• Facts: Oral assurance contradicted the bill of lading’s stated voyage route.
• Issue: Whether oral agreements could override the written terms of a bill of lading.
• Holding: The court allowed the oral evidence because the bill of lading was issued after the oral contract.

Question 6

Principle: Exemption clauses in a bill of lading will be upheld if they are incorporated into the contract and not unreasonable.

Answer 6

Silver v Ocean Steamship Co. [1930] 1 KB 416
• Facts: Goods were damaged during transit, and the bill of lading contained a clause limiting liability.
• Issue: Whether the exemption clause in the bill of lading protected the carrier.
• Holding: The court upheld the clause as valid under the circumstances.

Question 7

Principle: A bill of lading is only prima facie evidence of shipment and can be rebutted by proof to the contrary.

Answer 7

Crooks v Allan (1879) 41 LT 800
• Facts: A bill of lading was issued without actual shipment of goods.
• Issue: Whether the consignee could rely on the bill as proof of shipment.
• Holding: The court held that the consignee could not rely on the bill because no goods were ever shipped.

Question 8

Principle: Deviation from the agreed voyage route without justification discharges the carrier from liability limitation clauses.

Answer 8

Smith v Bedouin
• Facts: The ship deviated from the agreed route stated in the bill of lading.
• Issue: Whether deviation breached the terms of the bill and discharged the carrier’s obligations.
• Holding: Yes, deviation amounted to a breach of the carriage contract.

Question 9

Principle: A shipowner is not bound by a bill of lading issued by a master for goods never loaded—no estoppel applies here.

Answer 9

Grant v Norway (1851) 10 LT 218
• Facts: Ship master issued a bill of lading for goods not actually shipped.
• Issue: Whether the shipowner was bound by the master’s false statement.
• Holding: The shipowner was not liable for the master’s fraud.

Question 10

Principle: Only parties to the contract of carriage (usually the consignee or indorsee) can sue on a bill of lading.

Answer 10

Hanson v Hamel & Horley Ltd [1922] 2 AC 36
• Facts: A third party sought to enforce rights under a bill of lading to which they were not the named consignee.
• Issue: Could the third party sue on the bill of lading?
• Holding: The court held that the third party had no rights under the bill.

Question 11

Principle: Legal rights under a bill of lading belong to the consignee or lawful holder of the bill, not third parties.

Answer 11

Foreman & Ellams Ltd v Blackburn [1928] 2 KB 60
• Facts: Foreman & Ellams sued for damage to goods despite not being the consignee on the bill of lading.
• Issue: Whether a party who is not named in the bill of lading can claim under it.
• Holding: No, only the legal holder of the bill can sue.

Question 12

Principle: A carrier is not entitled to deliver goods without presentation of the bill of lading; doing so is a breach of contract.

Answer 12

Meyer v Aune (1939) 55 T.L.R 876
• Facts: Dispute arose over the transfer of goods before the bill of lading was presented.
• Issue: Whether delivery without production of the bill of lading was lawful.
• Holding: The carrier was liable for delivering without the bill.

Question 13

Principle: Under CIF contracts, conformity to the description in the bill of lading is essential; non-conforming goods can be rejected.

Answer 13

Landauer v Craven [1912] 2 KB 94
• Facts: Goods delivered did not match the description in the bill of lading.
• Issue: Whether the buyer was bound to accept goods that did not conform to the bill.
• Holding: No, the buyer could reject the goods.

Question 14

Principle: In CIF contracts, the seller’s duty is to provide conforming documents; failure entitles the buyer to reject.

Answer 14

Finlay v Kwik Hoo Tong [1929] 1 KB 400
• Facts: Buyer sought to reject documents because they were not strictly in line with the contract.
• Issue: Can a buyer reject documents under a CIF contract if they don’t match exactly?
• Holding: Yes, the buyer may reject non-conforming documents.

Question 15

Principle: A clean bill of lading must reflect the true condition of the goods at shipment; misrepresentation renders it voidable.

Answer 15

SIAT v Tradax [1980] 1 Lloyd’s Rep 53
• Facts: Dispute over whether a clean bill of lading had been fraudulently issued despite damaged goods.
• Issue: Was the bill of lading valid if it did not reflect the true condition of the goods?
• Holding: A clean bill issued fraudulently is not binding on the shipowner.

Question 16

Principle: Possession of a bill of lading does not in itself entitle the holder to sue unless property in the goods has passed.

Answer 16

Sewell v Burdick [1884] 10 AC 74
• Facts: A bill of lading was transferred as security but not intended to pass ownership.
• Issue: Does transfer of a bill of lading as collateral confer full title to sue?
• Holding: No, mere possession without intention to transfer property does not give the right to sue.

Question 17

Principle: The right to claim for loss or damage to goods depends on possession or title under the bill of lading.

Answer 17

Glyn Mills v East & West India Dock Co. (1882) 47 LT 809
• Facts: Goods were damaged while in the custody of the dock company before delivery to the consignee.
• Issue: Could the consignee claim damages without possession of the bill of lading?
• Holding: No; the right to sue depends on ownership or possession under the bill.

Question 18

Principle: A carrier owes duties only to lawful holders of the bill; liability cannot arise without proper transfer.

Answer 18

The Aramis [1989] 1 Lloyd’s Rep 212
• Facts: Goods delivered without bill of lading and consignees suffered loss.
• Issue: Whether a carrier was liable to the consignee without endorsement of the bill.
• Holding: No privity existed without proper endorsement.

Question 19

Principle: Bills of lading must accurately reflect shipment details; misstatements can amount to breach and fraud.

Answer 19

Arnold Karberg v Blythe, Green, Jourdain & Co. [1916] 1 QB 495
• Facts: A bill of lading was issued despite the goods being shipped on a different vessel.
• Issue: Whether the misdescription in the bill invalidated the buyer’s reliance.
• Holding: Yes, the bill was misleading.

Question 20

Principle: In CIF contracts, the seller’s obligation is fulfilled by tendering conforming documents; non-conformity gives the buyer the right to reject.

Answer 20

Manbre Saccharine Co. Ltd v Corn Products Co. Ltd [1919] 1 KB 198
• Facts: The buyer rejected goods on basis of discrepancy between bill of lading and the actual shipment.
• Issue: Whether the buyer could reject based on non-conformity of documents.
• Holding: Yes, under CIF terms documents must strictly comply.

Question 21

Principle: Only lawful holders or those with property in the goods can sue under a bill of lading.

Answer 21

The Galatian [1980] 1 All ER 501
• Facts: A dispute arose over whether the consignee had title to sue for damages under a bill of lading not endorsed.
• Issue: Could the consignee sue the carrier without being the lawful holder of the bill?
• Holding: No, without endorsement or lawful possession, there’s no title to sue.

Question 22

Principle: The bill of lading operates like a negotiable instrument in commerce, protecting bona fide transferees.

Answer 22

Henderson v Comptoir d’Escompte de Paris (1873) LR 5 PC 253
• Facts: Bills of lading had been fraudulently transferred, leading to a dispute about the rightful holder.
• Issue: Whether a transferee in good faith obtains rights under a fraudulently endorsed bill.
• Holding: Yes, a bona fide transferee for value acquires good title.

Question 23

Principle: In CIF contracts, the buyer is entitled to documents that are not only conforming but truthful—fraud vitiates tender.

Answer 23

Kwei Tek Chao v British Traders & Shippers [1954] 2 QB 459
• Facts: Goods shipped under CIF contract were not shipped on time, but documents were clean.
• Issue: Could the buyer reject the goods based on the misrepresented shipping date in the bill?
• Holding: Yes; fraudulent or misleading statements in the bill allow rejection.

Question 24

Principle: In some cases, the consignor may sue for loss to the consignee’s benefit to ensure someone can recover.

Answer 24

Dunlop v Lambert (1839) 6 Cl & Fin 600
• Facts: Goods were lost at sea; the consignor sued the carrier though the goods were meant for another party.
• Issue: Could the consignor claim damages even though they were not the final recipient?
• Holding: Yes, to prevent a failure of justice.

Question 25

Principle: Only the party with the proprietary interest or privity can sue, but exceptions arise to avoid injustice.

Answer 25

The Albazero [1976] 3 All ER 129 • Facts: Goods under a CIF contract were lost at sea after risk had passed to the buyer. • Issue: Could the seller sue on behalf of the buyer under the contract of carriage? • Holding: No, unless an exception like Dunlop v Lambert applies.

Question 26

Principle: An implied contract arises when a consignee presents the bill of lading and takes delivery—allowing them to sue the carrier.

Answer 26

Brandt v Liverpool, Brazil and River Plate Steam Navigation Co Ltd [1924] 1 KB 575 • Facts: Goods arrived, and the bank holding the bill of lading transferred it to the buyer, who then claimed damages from the carrier. • Issue: Was there a contract of carriage between the carrier and the end consignee who wasn’t the original party? • Holding: Yes, a contract was implied when the consignee took delivery.

Question 27

Principle: The bill of lading does not necessarily override pre-existing carriage terms, especially if issued post-shipment.

Answer 27

The Captain Gregos [1990] 1 Lloyd’s Rep 310 • Facts: The bill of lading was issued after shipment and contained terms inconsistent with the charterparty. • Issue: Whether the bill of lading terms overrode the original shipping agreement. • Holding: No; the contract terms (e.g., charterparty) prevail if the bill was not relied on in good faith.

Question 28

Principle: Mere endorsement or possession of a bill is insufficient; there must be evidence of contractual intention.

Answer 28

The Aramis [1989] 1 Lloyd’s Rep 213 • Facts: The holder of the bill of lading sued the carrier for damage, despite not having an express contract. • Issue: Could a non-contractual holder of a B.O.L sue the carrier? • Holding: No, unless there’s proof of a contract with that party.

Question 29

Principle: In CIF contracts, truth and accuracy in documentation are fundamental—clean bills must reflect actual shipment.

Answer 29

Panchaud Frères S.A. v Etablissement General Grain [1969] EWCA Civ J1106-2 • Facts: Documents tendered under a CIF contract contained a false shipment date. • Issue: Could the buyer reject the goods even if the documents appeared clean? • Holding: Yes, due to misrepresentation.

Question 30

Principle: Courts will examine the real agreement and conduct between parties, especially if the bill of lading is misleading.

Answer 30

The Antares • Facts: Bill of lading terms conflicted with the actual facts of shipment (e.g., stowage). • Issue: Were the printed terms enforceable despite factual inaccuracies? • Holding: The court prioritized actual conduct over boilerplate terms.

Question 31

Principle: Clauses in a bill of lading must clearly and expressly exempt negligence; ambiguity is resolved against the carrier.

Answer 31

Connolly Shar v Nordenfjeldske SS Co. (1934) 50 TLR 418 • Facts: Goods were shipped under a bill of lading that excluded liability for certain perils, but the loss arose due to the carrier’s negligence. • Issue: Could the carrier rely on the exemption clause despite being negligent? • Holding: No, exemption clauses do not protect carriers from liability arising from their own negligence unless explicitly stated.

Question 32

Principle: The bill of lading is prima facie evidence of the shipment details, and misstatements can give rise to liability, particularly to third parties acting in good faith.

Answer 32

Elder Dempster v Paterson Zochonis (1924) All ER 135 • Facts: A bill of lading stated the goods were shipped on a particular vessel, but in fact, they were not. • Issue: Could the consignee rely on the false statement in the B.O.L to claim damages? • Holding: Yes.

Question 33

Principle: The bill of lading serves as the contract of carriage; it is conclusive against the carrier when endorsed to third parties.

Answer 33

Freeman v Taylor (1831) 69 LT • Facts: A conflict arose over the delivery of goods not covered explicitly in the bill of lading. • Issue: Whether the shipowner had an obligation to deliver beyond the terms of the bill. • Holding: No, obligations are defined by the bill of lading.

Question 34

Principle: A liberty clause cannot be used to justify conduct that undermines the fundamental objective of the contract (e.g., timely arrival).

Answer 34

Glynn v Margetson (1893) 69 LT • Facts: The vessel deviated from the expected shipping route, leading to damage. • Issue: Could the carrier rely on a general liberty clause to justify the deviation? • Holding: No; the deviation defeated the commercial purpose of the contract.

Question 35

Principle: The bill of lading is conclusive evidence against the carrier in favor of third parties but not necessarily against the shipper if there is fraud or knowledge of the falsehood.

Answer 35

Hick v Raymond (1893) 68 LT 175 • Facts: A bill of lading was signed for goods not yet loaded onto the ship. • Issue: Was the carrier bound by the acknowledgment of receipt in the B.O.L? • Holding: No, where the shipper knew the goods weren’t on board.

Question 36

Principle: Breach of a condition in a bill of lading depends on the seriousness of the consequences, introducing the concept of innominate terms.

Answer 36

Hong Kong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 • Facts: Ship was unseaworthy due to an incompetent engine room crew, causing delay. • Issue: Was the breach of seaworthiness a fundamental breach entitling the charterer to terminate? • Holding: No, the breach was not sufficiently serious to repudiate the contract.

Question 37

Principle: Delivery must strictly comply with the terms of the bill of lading; otherwise, the carrier is liable.

Answer 37

Kish v Taylor [1912] AC 604 • Facts: Goods were shipped but misdelivered, resulting in a loss to the consignee. • Issue: Was the carrier liable despite handing over the goods to a person claiming under a forged bill? • Holding: Yes, the carrier is liable for delivery to a person not entitled under the bill.

Question 38

Principle: An exclusion clause in a B.O.L is binding on third parties if the document is properly indorsed and negotiated.

Answer 38

McFadden v Blue Star Line (1905) 93 LT 52 • Facts: A third party sued on a bill of lading containing an exception clause excluding liability for negligent stowage. • Issue: Was the clause enforceable against the third party? • Holding: Yes, provided it was properly incorporated.

Question 39

Principle: Even with a liberty clause, deviation must be reasonable and consistent with the contract’s commercial purpose.

Answer 39

Nelson & Sons v Nelson Line (Liverpool) Ltd [1908] AC 108 • Facts: The goods were shipped under a bill of lading containing a liberty clause that the ship could proceed via any route. The ship deviated and was delayed. • Issue: Was the deviation justified under the liberty clause? • Holding: No; the deviation was not reasonable and frustrated the voyage purpose.

Question 40

Principle: Clauses in bills of lading excluding liability are enforceable if the loss falls squarely within the terms and there’s no negligence.

Answer 40

Notara v Henderson (1872) 26 LT 442 • Facts: The consignee sued for non-delivery of goods, and the carrier argued that the bill of lading contained an exception for perils of the sea. • Issue: Could the carrier rely on the exception clause? • Holding: Yes, the loss was within the clause.