1. LESSON 17 Bill of Lading

4. A bill of lading (sometimes abbreviated as B/L or BoL) is a document issued by a carrier which details a shipment of merchandise and gives title of that shipment to a specified party.

5. Bills of lading are one of three important documents used in international trade to help guarantee that exporters receive payment and importers receive merchandise. A straight bill of lading is used when payment has been made in advance of shipment and requires a carrier to deliver the merchandise to the appropriate party. An order bill of lading is used when shipping merchandise prior to payment, requiring a carrier to deliver the merchandise to the importer, and at the endorsement of the exporter the carrier may transfer title to the importer. Endorsed order bills of lading can be traded as a security or serve as collateral against debt obligations.

6. A bill of lading is a standard-form document
A bill of lading is a standard-form document. It is transferable by endorsement (or by lawful transfer of possession) and is a receipt from shipping company regarding the number of packages with a particular weight and markings and a contract for the transportation of same to a port of destination mentioned therein.

7. In the case of Coventry v Gladstone, Lord Justice Blackburn defined a Bill of Lading as "A writing signed on behalf of the owner of ship in which goods are embarked, acknowledging the receipt of the Goods, and undertaking to deliver them at the end of the voyage, subject to such conditions as may be mentioned in the bill of lading." A bill of lading is a key document used in the transport of goods. As a document of title, it is also an important financial instrument.

8. A bill of lading is a document generated by a shipping line or its agent, giving details of a shipment of merchandise. Alongside this principal purpose, the bill of lading also certifies that the goods have been shipped aboard a vessel (and in some cases certifies the condition of the goods at the point of loading), assigns title to the goods, and requires the carrier to release the merchandise to the holder of the title or a named party at the destination port.

9. As cargo receipt
The principal use of the bill of lading is as a receipt issued by the carrier once the goods have been loaded onto the vessel. This receipt can be used as proof of shipment for customs and insurance purposes, and also as commercial proof of completing a contractual obligation, especially under Incoterms such as CFR (cost and freight) and FOB (free on board).

10. As evidence of the contract of carriage
The bill of lading will rarely be the contract itself, since the cargo space will have been booked previously, perhaps by telephone, or letter. The preliminary contract will be acknowledged by both the shipper and carrier to incorporate the carrier's standard terms of business. If the Hague-Visby Rules apply, then all of the Rules will be automatically annexed to the bill of lading, thus forming a statutory contract.

11. As title
The bill of lading confers prima facie title over the goods to the named consignee or lawful holder. Under the "nemo dat quod non habet" rule ("no-one may give what he ain't got"), a seller cannot pass better title than he himself has; so if the goods are subject to an encumbrance (such as a mortgage, charge or hypothec), or even stolen, the bill of lading will not grant full title to the holder.

12. Bills of lading have a number of additional attributes, such as on-board, and received-for-shipment. An on- board bill of lading denotes that merchandise has been physically loaded onto a shipping vessel, such as a freighter or cargo plane. A received-for-shipment bill of lading denotes that merchandise has been received, but is not guaranteed to have already been loaded onto a shipping vessel. Such bills can be converted upon being loaded.

13. For many years, the industry has sought a solution to the difficulties, costs and inefficiencies associated with paper bills of lading. The obvious answer is to make the bill an electronic document. Electronic bill of lading or eB/L is the legal and functional equivalent of a paper bill of lading.

14. An electronic bill of lading (eB/L) must clearly replicate the core functions of a paper bill of lading, namely its functions as a receipt, as evidence of or containing the contract of carriage and, if negotiable, as a document of title.