Three functions of a bill of lading

1
Three functions of a bill of lading

• As a receipt
• Shipped on board in apparent good order and
  condition
• As evidence of the contract of carriage
• Contract itself made before bill of lading is
  issued
• As document of title
• Gives the right to possession
• The key to the warehouse

2
Inequality of bargaining power

• Bills of lading/sea waybills/air waybills -
  pro-carrier (on their face)
• Take it or leave it
• Perceived need to level the playing field
• As ever, international uniformity desirable
• US interventionism vs UK freedom of contract

3
Compromise Hague Rules 1924 (Brussels Convention)

• Minimum content of carriers liability (Art 3, r
  8)
• Carriers liability limited in amount (Art 4, r
  5)
• Originally 100 per package
• Provisions re operation of bill of lading as
  receipt (Art 3, r 3)
• What carrier is obliged to say

4
Hague Rules, Art 3, r 8

• Any clause, covenant, or agreement in a
  contract of carriage relieving the carrier or the
  ship from liability for loss or damage to, or in
  connexion with, goods arising from negligence,
  fault, or failure in the duties and obligations
  provided in this article or lessening such
  liability otherwise than as provided in this
  convention, shall be null and void and of no
  effect.
• Ie, precisely opposite effect to Art 6 CISG

5
Decaying international uniformity

• Hague Rules ruled until late 1960s (at least
  after 1936 when USA adopted)
• Amended 1968 - Hague-Visby Rules
• Principally, changed limitation amount
• Some countries have adopted amendments (Aus, UK,
  Japan, NZ, etc)
• Others not (USA, India, Malaysia, etc)

6
Decaying international uniformity (contd)

• Hamburg Rules 1978
• Mainly developing countries
• Australia flirted with
• As of 1 July 1998, Australia has
  Hague-Visby/Hamburg hybrid
• Other hybrids - Scandinavian countries, PRC, soon
  the USA
• Different hybrids in different countries

7
Order bill of lading is negotiable

• Carrier will deliver only to shippers order
• Only to holder of original, indorsed bill
• Therefore, bill represents goods
• Therefore, bill has value while goods are at sea
• Therefore, goods can be bought/sold/pledged by
  dealing with bill of lading