ASG Law

Tag: bill of lading

  • Bill of Lading Limitations: How Philippine Law Protects Cargo Carriers and Consignees

    Limited Liability in Shipping Contracts: Understanding Bill of Lading Limitations in the Philippines

    TLDR: Philippine law allows shipping companies to limit their liability for lost or damaged cargo if clearly stated in the bill of lading. This case clarifies that consignees are bound by these limitations, even if they didn’t directly sign the shipping contract, emphasizing the importance of declared cargo value and understanding shipping terms.

    G.R. No. 122494, October 08, 1998

    INTRODUCTION

    Imagine importing valuable goods, only to find part of your shipment missing upon arrival. While the frustration is immediate, understanding the fine print of your shipping contract, specifically the bill of lading, becomes crucial. Philippine businesses engaged in import and export face this reality regularly. The case of Everett Steamship Corporation v. Court of Appeals tackles this very issue, focusing on the enforceability of limited liability clauses in bills of lading and their impact on consignees – the recipients of the shipped goods. At the heart of the dispute was whether a shipping company could limit its liability for lost cargo to a pre-set amount, even if the actual loss was significantly higher. This case underscores the importance of understanding the terms and conditions of shipping contracts, particularly those concerning liability limitations.

    LEGAL CONTEXT: ARTICLES 1749 AND 1750 OF THE CIVIL CODE

    Philippine law, specifically the Civil Code, acknowledges the validity of agreements that limit a common carrier’s liability. This isn’t a free pass for negligence, but rather a framework for managing risk and setting reasonable expectations in shipping contracts. Two key articles govern this:

    • Article 1749: “A stipulation that the common carrier’s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.”
    • Article 1750: “A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.”

    These articles essentially allow carriers to limit their financial exposure, provided certain conditions are met. The limitation must be “reasonable and just” and “fairly and freely agreed upon.” Furthermore, carriers often include clauses stating their liability is capped at a certain amount unless the shipper declares a higher value for the goods and pays additional freight charges. This system allows shippers to choose the level of protection they need, balancing cost and risk. The Supreme Court has consistently upheld these clauses, recognizing their importance in the commercial shipping industry. These stipulations are considered “contracts of adhesion,” meaning one party (the carrier) drafts the contract, and the other party (the shipper) essentially adheres to it. While contracts of adhesion are valid, Philippine courts ensure they are not oppressive, especially to the weaker party.

    CASE BREAKDOWN: EVERETT STEAMSHIP CORPORATION VS. HERNANDEZ TRADING CO. INC.

    Hernandez Trading Co. Inc. imported bus spare parts from Japan via Everett Steamship Corporation. Three crates were shipped, but upon arrival in Manila, one crate (MARCO C/No. 14) was missing. Everett Steamship admitted the loss but pointed to Clause 18 of their bill of lading, which limited their liability to ¥100,000 per package, unless a higher value was declared. Hernandez Trading, however, claimed the actual value of the lost crate was ¥1,552,500 and demanded full compensation.

    The Regional Trial Court (RTC) initially sided with Hernandez Trading. The RTC reasoned that the limited liability clause, printed in small font on the back of the bill of lading, was not “fairly and freely agreed upon.” The court emphasized that Hernandez Trading, as the consignee, wasn’t even a signatory to the bill of lading. The RTC ordered Everett Steamship to pay the full value of the lost cargo, plus attorney’s fees.

    Everett Steamship appealed to the Court of Appeals (CA). The CA affirmed the RTC’s decision, removing only the attorney’s fees. The CA echoed the RTC’s sentiment that Hernandez Trading, not being privy to the shipping contract between Everett and the shipper (Maruman Trading), was not bound by the bill of lading’s terms. The CA stated, “Never having entered into a contract with the appellant, appellee should therefore not be bound by any of the terms and conditions in the bill of lading.”

    Undeterred, Everett Steamship elevated the case to the Supreme Court. The Supreme Court reversed the Court of Appeals and ruled in favor of Everett Steamship. The Supreme Court’s decision hinged on several key points:

    • Validity of Limited Liability Clauses: The Court reiterated that Articles 1749 and 1750 of the Civil Code, along with established jurisprudence, validate limited liability clauses in bills of lading. The Court quoted its previous ruling in Sea Land Service, Inc. vs Intermediate Appellate Court, stating that such stipulations are “just and reasonable” as they offer shippers the option to declare a higher value and avoid the liability limitation.
    • Consignee is Bound by Bill of Lading: The Supreme Court clarified that even though Hernandez Trading was not a signatory to the bill of lading, as the consignee who claimed the goods and filed suit based on that bill, they became bound by its terms. The Court stated, “When private respondent formally claimed reimbursement for the missing goods from petitioner and subsequently filed a case against the latter based on the very same bill of lading, it (private respondent) accepted the provisions of the contract and thereby made itself a party thereto…”
    • Shipper’s Responsibility to Declare Value: The Court emphasized that the shipper, Maruman Trading, had the responsibility to declare a higher value if the cargo exceeded the ¥100,000 limit. The bill of lading clearly stated this option. Since Maruman Trading did not declare a higher value, the Court held that they, and consequently Hernandez Trading, must bear the consequences of this choice.

    In essence, the Supreme Court emphasized the contractual nature of bills of lading and the importance of adhering to agreed-upon terms, even in contracts of adhesion. The Court underscored that while contracts of adhesion require careful scrutiny, they are not inherently invalid. The Court stated, “The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent.”

    PRACTICAL IMPLICATIONS: PROTECTING YOUR BUSINESS IN SHIPPING

    This case provides crucial lessons for businesses involved in importing and exporting goods in the Philippines. It highlights the significance of carefully reviewing and understanding bills of lading, particularly the clauses related to liability limitations. Ignoring the fine print can have significant financial repercussions if cargo is lost or damaged.

    For shippers (like Maruman Trading in this case), the key takeaway is to assess the value of your cargo and understand the carrier’s liability limitations. If your goods exceed the standard limitation, declare a higher value and pay the corresponding extra freight. This upfront cost is a form of insurance, protecting you from potentially larger losses down the line.

    For consignees (like Hernandez Trading), even though you are not the original signatory to the bill of lading, you are bound by its terms when you claim the shipment. Before initiating a claim, carefully review the bill of lading to understand the liability limitations and ensure compliance with any declaration requirements. Do not assume you can recover the full value of your goods if the bill of lading stipulates a lower limit and no higher value was declared.

    Key Lessons:

    • Read the Bill of Lading Carefully: Don’t overlook the fine print, especially clauses concerning liability limitations.
    • Declare Cargo Value: If your cargo’s value exceeds the carrier’s standard limit, declare a higher value in writing and pay the extra freight.
    • Understand Consignee Obligations: As a consignee, you are generally bound by the terms of the bill of lading when you accept the shipment and pursue claims.
    • Negotiate if Possible: For high-value shipments, consider negotiating terms with the carrier or seeking additional cargo insurance.
    • Seek Legal Advice: If you encounter disputes or unclear clauses in your bill of lading, consult with a legal professional specializing in maritime or commercial law.

    FREQUENTLY ASKED QUESTIONS (FAQs)

    Q: What is a bill of lading?

    A: A bill of lading is a crucial document in shipping. It serves as a receipt for the goods, a contract of carriage between the shipper and carrier, and a document of title, representing ownership of the goods.

    Q: What is a limited liability clause in a bill of lading?

    A: This clause sets a maximum amount that the carrier will be liable for in case of loss or damage to the cargo, unless a higher value is declared and extra freight is paid.

    Q: Am I bound by a bill of lading if I didn’t sign it?

    A: Yes, as a consignee, when you claim the goods and act based on the bill of lading, you are generally considered bound by its terms, even if you didn’t directly sign it.

    Q: What happens if the limited liability clause is in very small print?

    A: Philippine courts recognize contracts of adhesion are valid, even if terms are in fine print. However, courts will scrutinize such contracts to prevent unfairness, especially if there’s evidence of deception or oppression. It’s still your responsibility to read and understand the terms.

    Q: Can I recover the full value of my lost cargo even if there’s a limited liability clause?

    A: Generally, no, if the clause is valid and you didn’t declare a higher value. You are typically limited to the amount stipulated in the clause. However, if you can prove gross negligence or bad faith on the carrier’s part, you might have grounds to argue against the limitation.

    Q: What should I do if I’m shipping high-value goods?

    A: Always declare the full value of your goods in writing to the carrier and ensure it’s reflected in the bill of lading. Pay any extra freight charges for this declared value. Consider additional cargo insurance for added protection.

    Q: Is the carrier always protected by the limited liability clause?

    A: Not always. The limitation must be reasonable, just, and fairly agreed upon. Gross negligence or intentional misconduct by the carrier might invalidate the clause. However, the burden of proof lies with the claimant.

    Q: Where can I find the liability limitations in a bill of lading?

    A: Liability limitations are usually found in the terms and conditions section, often on the back of the bill of lading or in a separate document incorporated by reference. Look for headings like “Limitation of Liability,” “Package Limitation,” or similar phrases.

    Q: What laws govern bills of lading in the Philippines?

    A: Bills of lading in the Philippines are primarily governed by the Civil Code of the Philippines, particularly Articles 1732-1766 concerning common carriers, and supplementary laws like the Carriage of Goods by Sea Act (COGSA) for international shipments to and from the US, and relevant international conventions.

    ASG Law specializes in Transportation and Shipping Law, and Commercial Litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Misdelivery and Bills of Lading: Understanding Carrier Liability in Philippine Shipping Law

    Shipper’s Instructions Trump Bill of Lading: Key Takeaways on Misdelivery

    TLDR: In Philippine shipping law, a carrier may be absolved from liability for misdelivery if they can prove they followed specific instructions from the shipper, even if those instructions deviate from the bill of lading’s consignee details. This case highlights the importance of clear communication and documentation in shipping transactions, especially concerning perishable goods and payment arrangements.

    [ G.R. No. 125524, August 25, 1999 ]

    Introduction

    Imagine your business relies on timely delivery of perishable goods across international borders. A slight misstep in the shipping process can lead to significant financial losses, spoilage, and strained business relationships. The case of Benito Macam v. Court of Appeals delves into such a scenario, exploring the complex interplay between bills of lading, shipper instructions, and carrier liability when goods are delivered to a party not explicitly named as the consignee in the official shipping documents. This case unravels the nuances of misdelivery claims in the Philippines, providing crucial lessons for shippers and carriers alike on navigating the often-turbulent waters of international trade.

    At the heart of this dispute is a shipment of watermelons and mangoes from the Philippines to Hong Kong. Benito Macam, the shipper, sued the shipping company for delivering the goods to Great Prospect Company (GPC), the ‘notify party,’ instead of the consignee listed on the bill of lading, National Bank of Pakistan (PAKISTAN BANK). Macam argued this was misdelivery, entitling him to compensation. The central legal question became: Can a carrier be held liable for misdelivery when they deliver goods based on the shipper’s explicit instructions, even if it deviates from the bill of lading?

    Legal Framework: Carrier Responsibility and the Bill of Lading

    Philippine law, specifically Article 1736 of the Civil Code, establishes the “extraordinary responsibility” of common carriers. This responsibility commences the moment goods are unconditionally placed in the carrier’s possession for transportation and extends until they are delivered, actually or constructively, to the consignee or someone with the right to receive them. Article 1736 states:

    “Art. 1736. The extraordinary responsibility of the common carriers lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738.”

    This provision underscores the high standard of care expected from carriers. A crucial document in shipping is the bill of lading. This document serves multiple vital functions:

    • Receipt: It acknowledges the carrier’s receipt of the goods for shipment.
    • Contract of Carriage: It embodies the terms and conditions of the agreement for transporting the goods.
    • Document of Title: It represents ownership of the goods, especially in international trade, and is often required for payment and release of cargo.

    Typically, carriers are obligated to deliver goods only upon presentation of an original bill of lading. This safeguard ensures that goods are delivered to the rightful owner or their designated representative, often the consignee named in the bill of lading. However, commercial realities sometimes necessitate deviations from strict adherence to the bill of lading, particularly with perishable goods where timely delivery is paramount.

    Prior Supreme Court jurisprudence, such as Eastern Shipping Lines, Inc. v. Court of Appeals and Samar Mining Company, Inc. v. Nordeutscher Lloyd, reinforces the carrier’s duty to deliver to the consignee or a person with the right to receive the goods. These cases generally uphold the bill of lading as the primary document governing delivery. However, the Macam case introduces a significant nuance: what happens when the shipper themselves instructs the carrier to deviate from the bill of lading’s delivery instructions?

    Case Narrative: Telex Instructions and Trade Practices

    Benito Macam, doing business as Ben-Mac Enterprises, shipped watermelons and mangoes to Hong Kong via China Ocean Shipping Co., represented by their agent Wallem Philippines Shipping, Inc. (WALLEM). The bills of lading named PAKISTAN BANK as the consignee and Great Prospect Company (GPC) as the ‘notify party.’ Macam received advance payment from his bank, Consolidated Banking Corporation (SOLIDBANK), based on these bills of lading.

    Upon arrival in Hong Kong, WALLEM delivered the shipment directly to GPC without requiring presentation of the original bills of lading. Subsequently, GPC failed to pay PAKISTAN BANK, who in turn refused to pay SOLIDBANK. SOLIDBANK, having already prepaid Macam, sought reimbursement from WALLEM, but WALLEM refused. Macam then repaid SOLIDBANK and filed a collection suit against WALLEM, alleging misdelivery.

    WALLEM’s defense hinged on a crucial piece of evidence: a telex dated April 5, 1989. This telex allegedly contained instructions from the shipper (Macam) to deliver the shipment to the “respective consignees” without presentation of the original bills of lading or bank guarantee. The telex stated: “AS PER SHPR’S REQUEST KINDLY ARRANGE DELIVERY OF A/M SHIPT TO RESPECTIVE CNEES WITHOUT PRESENTATION OF OB/L and bank guarantee since for prepaid shipt ofrt charges already fully paid our end x x x x”. WALLEM argued that delivering to GPC was in accordance with Macam’s request and standard practice for perishable goods.

    The Regional Trial Court (RTC) initially ruled in favor of Macam, finding that WALLEM breached the bill of lading by releasing the shipment to GPC without the bills of lading and bank guarantee. The RTC emphasized that GPC was merely the ‘notify party’ and not the consignee. However, the Court of Appeals (CA) reversed the RTC decision. The CA highlighted the established business practice between Macam and WALLEM, where previous shipments to GPC were often delivered without bill of lading presentation. The CA also noted that the telex instruction superseded the bill of lading and that GPC, as the buyer/importer, was the intended recipient. Crucially, the CA pointed out inconsistencies in Macam’s claims, including the lack of evidence that he actually reimbursed SOLIDBANK.

    The Supreme Court (SC) affirmed the Court of Appeals’ decision, siding with WALLEM. The SC meticulously examined Macam’s own testimony, noting his admissions about routinely requesting immediate release of perishable goods via phone calls, dispensing with bank guarantees for prepaid shipments, and prior dealings with GPC without bill of lading presentation. The Court stated:

    “Against petitioner’s claim of ‘not remembering’ having made a request for delivery of subject cargoes to GPC without presentation of the bills of lading and bank guarantee as reflected in the telex of 5 April 1989 are damaging disclosures in his testimony. He declared that it was his practice to ask the shipping lines to immediately release shipment of perishable goods through telephone calls by himself or his ‘people.’ He no longer required presentation of a bill of lading nor of a bank guarantee as a condition to releasing the goods in case he was already fully paid.”

    The SC agreed with the CA’s interpretation of the telex instruction, concluding that “respective consignees” in the telex, in the context of the established practice and perishable nature of the goods, referred to GPC as the buyer/importer, not PAKISTAN BANK. The Court further reasoned:

    “To construe otherwise will render meaningless the telex instruction. After all, the cargoes consist of perishable fresh fruits and immediate delivery thereof to the buyer/importer is essentially a factor to reckon with. Besides, GPC is listed as one among the several consignees in the telex (Exhibit 5-B) and the instruction in the telex was to arrange delivery of A/M shipment (not any party) to respective consignees without presentation of OB/L and bank guarantee x x x x”

    Ultimately, the Supreme Court ruled that WALLEM was not liable for misdelivery because they acted upon the shipper’s (Macam’s) own instructions, as evidenced by the telex and his established business practices.

    Practical Implications: Shipper Responsibility and Clear Instructions

    The Benito Macam case provides critical insights into the responsibilities of shippers and carriers, particularly in transactions involving bills of lading and delivery instructions. This ruling underscores that while bills of lading are crucial documents, a shipper’s direct and documented instructions to the carrier can override the consignee designation in the bill of lading, especially when supported by established trade practices and the nature of the goods.

    For businesses involved in shipping, especially perishable goods, the implications are significant:

    • Clear Communication is Key: Shippers must ensure their instructions to carriers are clear, unambiguous, and documented, preferably in writing like telexes or emails. Verbal instructions, while sometimes practical for perishable goods, can be difficult to prove in case of disputes.
    • Document Everything: Maintain records of all communications with carriers, including requests for delivery modifications, especially when deviating from standard bill of lading procedures. This documentation serves as crucial evidence in case of disagreements.
    • Understand Trade Practices: Be aware of established trade practices in specific industries and regions. In the perishable goods sector, immediate delivery is often prioritized, and carriers may rely on shipper instructions for quicker release, even without strict bill of lading presentation.
    • Review Bills of Lading Carefully: While shipper instructions can be controlling, ensure the bill of lading accurately reflects the intended transaction and consignee, unless a deliberate deviation is intended and clearly communicated.
    • Due Diligence on Payment: Secure payment arrangements independently of delivery instructions. In this case, the payment failure by GPC, not the delivery itself, was the root cause of Macam’s loss. Consider using robust payment mechanisms like confirmed letters of credit to mitigate payment risks.

    Key Lessons

    • Shipper Instructions Matter: Documented instructions from the shipper can supersede the bill of lading’s consignee designation under certain circumstances.
    • Context is Crucial: The perishable nature of goods and established trade practices are vital factors in interpreting delivery instructions.
    • Evidence is King: Clear and convincing evidence, like the telex in this case, is essential to prove shipper instructions and deviate from standard bill of lading procedures.

    Frequently Asked Questions (FAQs)

    Q: What is a Bill of Lading (B/L)?

    A: A Bill of Lading is a document issued by a carrier to a shipper, acknowledging receipt of goods for transport. It serves as a receipt, a contract of carriage, and a document of title, representing ownership of the goods.

    Q: What does ‘Consignee’ and ‘Notify Party’ mean in a Bill of Lading?

    A: The ‘Consignee’ is the party to whom the goods are to be delivered, typically the buyer or a bank in letter of credit transactions. The ‘Notify Party’ is a party to be notified upon arrival of the goods, often the actual buyer or importer, even if they are not the consignee for payment purposes.

    Q: What is ‘Misdelivery’ in shipping law?

    A: Misdelivery occurs when a carrier delivers goods to the wrong party, i.e., someone not authorized to receive them under the terms of the bill of lading or shipper instructions. This can lead to carrier liability for the value of the goods.

    Q: When is a carrier liable for misdelivery?

    A: Generally, carriers are liable for misdelivery if they fail to deliver goods to the consignee named in the bill of lading or someone authorized to receive them. However, liability can be mitigated by valid defenses, such as following shipper’s instructions or established trade practices.

    Q: How can shippers protect themselves from misdelivery issues?

    A: Shippers should issue clear, written delivery instructions to carriers, document all communications, understand trade practices, and secure robust payment arrangements independent of delivery. Using letters of credit and cargo insurance can further mitigate risks.

    Q: What is the significance of the telex in this case?

    A: The telex served as crucial evidence of the shipper’s (Macam’s) instructions to deliver the goods without presentation of the bill of lading. This evidence was pivotal in absolving the carrier from liability for delivering to GPC instead of PAKISTAN BANK.

    Q: Can shipper’s instructions always override the bill of lading?

    A: While shipper’s instructions can be influential, they are not absolute. Courts will consider the totality of circumstances, including the bill of lading terms, established trade practices, the nature of goods, and the clarity and evidence of shipper’s instructions. It is best practice to align instructions with the bill of lading whenever possible to avoid disputes.

    ASG Law specializes in Transportation and Shipping Law. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Bill of Lading: Understanding Your Responsibilities as Consignee

    Bill of Lading: Acceptance Implies Agreement, Even Without a Signature

    TLDR: This case clarifies that accepting a bill of lading, even without signing it, implies agreement to its terms. Consignees are responsible for demurrage charges if they delay in receiving shipments, and disputes with the shipper are separate from the carrier’s rights.

    G.R. No. 116863, February 12, 1998

    Imagine a shipment of goods arriving at a port, and the intended recipient refuses to take delivery, leading to mounting storage fees. Who is responsible for these fees? This scenario highlights the importance of understanding the legal implications of a bill of lading, a document that governs the relationship between shippers, carriers, and consignees.

    The Supreme Court case of Keng Hua Paper Products Co. Inc. vs. Court of Appeals tackles this very issue, emphasizing that accepting a bill of lading, even without a signature, binds the consignee to its terms and conditions. This includes the responsibility for demurrage charges arising from delays in unloading the shipment.

    Legal Context: The Bill of Lading as a Contract

    A bill of lading is more than just a receipt; it’s a contract. It serves a dual purpose, as the Supreme Court emphasizes: “First, it is a receipt for the goods shipped. Second, it is a contract by which three parties, namely, the shipper, the carrier, and the consignee undertake specific responsibilities and assume stipulated obligations.”

    This contract outlines the responsibilities of each party involved in the shipping process. The shipper is responsible for providing accurate information about the goods, the carrier is responsible for transporting the goods safely, and the consignee is responsible for accepting delivery of the goods and paying any associated charges.

    The Civil Code of the Philippines also plays a crucial role in understanding contractual obligations. Article 1159 states, “Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.” This principle underscores the binding nature of the bill of lading once it is accepted by the parties involved.

    Even without a signature, acceptance of a bill of lading implies consent to its terms. As the Court noted, “(a)cceptance of a paper containing the terms of a proposed contract generally constitutes an acceptance of the contract and of all of its terms and conditions of which the acceptor has actual or constructive notice.”

    Case Breakdown: Keng Hua Paper Products vs. Sea-Land Service

    Keng Hua Paper Products Co. (Keng Hua) purchased waste paper from a shipper in Hong Kong, Ho Kee Waste Paper. Sea-Land Service, Inc. (Sea-Land), a shipping company, transported the goods to Manila. Upon arrival, Keng Hua refused to accept the shipment, claiming overshipment and potential violations of Central Bank rules.

    The container sat at the port for 481 days, accruing demurrage charges of ₱67,340. Sea-Land sued Keng Hua to recover these charges. Keng Hua argued that it never explicitly accepted the bill of lading and that the overshipment justified its refusal to receive the goods.

    Here’s a breakdown of the case’s procedural journey:

    • Regional Trial Court (RTC): Ruled in favor of Sea-Land, ordering Keng Hua to pay the demurrage charges, plus interest and attorney’s fees.
    • Court of Appeals (CA): Affirmed the RTC’s decision in toto, holding that Keng Hua’s acceptance of the bill of lading, without timely objection, bound it to its terms.
    • Supreme Court (SC): Affirmed Keng Hua’s liability for demurrage but modified the interest rate and deleted the award of attorney’s fees.

    The Supreme Court emphasized that Keng Hua’s prolonged inaction after receiving the bill of lading implied acceptance of its terms. The Court quoted the Court of Appeals: “After accepting the bill of lading, receiving notices of arrival of the shipment, failing to object thereto, (herein petitioner) cannot now deny that it is bound by the terms in the bill of lading.”

    Furthermore, the Court stated, “Mere apprehension of violating said laws, without a clear demonstration that taking delivery of the shipment has become legally impossible, cannot defeat the petitioner’s contractual obligation and liability under the bill of lading.”

    Practical Implications: What This Means for Businesses

    This case provides valuable lessons for businesses involved in international trade. It underscores the importance of carefully reviewing and understanding the terms of a bill of lading before accepting it. Failure to do so can result in unexpected liabilities, such as demurrage charges.

    Disputes regarding the quantity or quality of goods should be resolved directly with the shipper, separate from the carrier’s contractual rights under the bill of lading. Consignees cannot simply refuse to accept shipments based on alleged discrepancies without facing potential financial consequences.

    Key Lessons:

    • Acceptance Implies Agreement: Even without a signature, accepting a bill of lading implies agreement to its terms.
    • Timely Objection is Crucial: Object to any unfavorable terms in the bill of lading immediately upon receipt.
    • Separate Disputes: Resolve disputes with the shipper separately from your obligations to the carrier under the bill of lading.
    • Legal Impossibility: Only a clear demonstration of legal impossibility can excuse you from your obligations under the bill of lading.

    Frequently Asked Questions (FAQs)

    Q: What is a bill of lading?

    A: A bill of lading is a document that serves as a receipt for goods shipped, a contract of carriage, and a document of title.

    Q: Am I bound by a bill of lading if I didn’t sign it?

    A: Yes, acceptance of a bill of lading, even without signing it, implies agreement to its terms.

    Q: What are demurrage charges?

    A: Demurrage charges are fees assessed for delays in unloading a shipment from a carrier’s container or vessel beyond the allowed free time.

    Q: What if there’s a discrepancy between the goods I ordered and the goods described in the bill of lading?

    A: You should address this discrepancy with the shipper. Your obligation to the carrier under the bill of lading remains separate.

    Q: Can I refuse to accept a shipment if I suspect it violates customs laws?

    A: Only if you can demonstrate that accepting the shipment would result in a clear violation of customs laws.

    Q: What should I do if I receive a bill of lading with unfavorable terms?

    A: Object to the terms immediately in writing and attempt to negotiate a modification with the carrier.

    Q: How does a letter of credit affect my obligations under a bill of lading?

    A: A letter of credit is a separate transaction between the buyer and the issuing bank. It does not affect your obligations to the carrier under the bill of lading.

    Q: What is “Shipper’s Load and Count”?

    A: Under this arrangement, the shipper is responsible for loading the container and providing an accurate count of the goods. The carrier is not responsible for verifying the contents.

    ASG Law specializes in maritime law and international trade. Contact us or email hello@asglawpartners.com to schedule a consultation.