TTM15140 - Background material: Shipping contracts
Bills of lading
A bill of lading forms the basic document used in the shipping of goods by sea. It is issued by the ship operator to the shipper (or customer), and has three principal uses, namely as
- receipt for the goods (acknowledgement by the shipowner to the shipper)
- evidence of the contract for the carriage of those goods (contract of affreightment), and
- evidence that its holder has the right to claim possession of the goods
Three originals and a number of copies are produced, with the copies being kept for reference by those through whose hands the originals pass. One is retained by the master or broker, and the other two dispatched by the shipper to the buyer of the goods, or to the consignee for those goods, if not the buyer. One original will be presented to the master by the customer as evidence of his title to receive the goods. The bill of lading is thereby described as ‘accomplished’.
A ‘through bill of lading’ will cover the situation where the shipowner is responsible for the onward carriage of goods by means of, say, road haulage.
Charterparty and bill of lading
The charterparty remains the principal contract for the hire of a ship, whereas the bill of lading relates to the goods carried.
Where the contract for the carriage of goods is one of many for the one voyage, the bill of lading will govern the contract terms in addition to acting as a receipt and evidence of title.
Where the whole ship is chartered for the carriage of goods the governing document will be the charterparty.
However, the charterer of the ship may not ship goods himself, but may transfer his right to do so to a third party, when there will be both a charterparty and a bill of lading issued by either the shipowner or the charterer (or their respective agents). Disputes as to conflicting clauses are not unknown.
References
Contracts of affreightment – TTM15100
Bareboat charterparties – TTM15110
Time charterparties – TTM15120
Voyage charterparties – TTM15130