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Bill of Lading Contract

Bill of Lading, Nature of

Carrier of Goods, Liability of

RETLA clause, The

Law and Sea.
Bill of Lading Contract. Date and Cargo Quantity Statements.

The master’s signature on the bill confirms conformity of the quantity and quality of the cargo loaded with that description represented in bill of lading. If the master signs the bill knowing that the statement as to apparent quality and quantity of the goods or the date of shipment is incorrect, he makes the owners vicariously liable in fraud to anyone who suffers loss by relying on the presentation.

Good Order (Apparent Good Order)
Last updated: 08-Jul-2015

Tokio Marine & Fire Insurance Company Ltd v Retla Steamship Company [1970] 2 Lloyd’s Rep 91:

The term ‘apparent good order and condition’ when used in this Bill of Lading with reference to iron, steel or metal products does not mean that the goods when received, were free of visible rust or moisture. If the shipper so requests, a substitute Bill of Lading will be issued omitting the above definition and setting forth any notations which may appear on the mates' or tally clerks' receipts.

Per Colman J in The David Agmashenebeli [2002] EWHC 104 (Admlty)

It may therefore fairly be said that the statement in bills of lading as to the apparent order and condition of the goods will in many cases be of fundamental importance to the operation of international contracts for the sale of goods carried by sea and to the operation of contracts for the carriage of goods by sea.

It is the shipper or the shipper’s agent who in the ordinary way tenders the bill to the carrier or the carrier’s agent, usually the master, for signature. In so doing, the shipper invites the carrier to acknowledge the truth of the statement in the tendered bill as to the order and condition of the goods which the shipper has delivered into the possession of the carrier pursuant to the contract of affreightment. In determining whether the carrier by the master’s or other agent’s signature accepts contractual responsibility for the accuracy of the statement as to the condition of the goods it is relevant to take account of the fact that it is the shipper or his agent who is delivering the goods and that accordingly any such statement would be as to facts of which he must already have actual or imputed knowledge. Further, because the shipper already has that knowledge he cannot be said to rely on the accuracy of the statement. His requirement goes no further than the need to obtain from the carrier a receipt for the goods in appropriate form. The tender for signature of a bill which states the order and condition of the goods is thus an invitation to the carrier to express his acknowledgment of the truth of the statements in the bill. As such it is an invitation to make a representation of fact as distinct from a binding promise as to the accuracy of the represented facts. The purpose of making that representation is to record the carrier’s evidence as to his receipt of the goods and as to their apparent condition when he did receive them for carriage. Given that bills of lading are negotiable instruments, the specific function of recording that evidence is to inform subsequent holders of the facts represented, for those facts are likely to be relevant to their exercise of contractual rights against sellers of the goods or, indeed, the carriers themselves.

No doubt where a master proposes to qualify the statement as to the good order and condition of the cargo in a mate’s receipt or bill of lading it would be sensible for him to warn the shipper’s representative that he proposes to do so. That is a matter of common sense so as to give the opportunity to avoid disputes which may involve delays to the vessel, but in the last resort it is the master’s own judgment which is to be recorded and it is open to him to record it by words which reasonably reflect that judgment.

In Sea Success Maritime v African Maritime Carriers [2005] EWHC 1542 (Comm) per Aikens J at para 24:

… that cargo that is properly described as damaged or imperfect in some way can be stated to be in "good order and condition" in the sense of being in "proper" order and condition. Thus a cargo described in a bill of lading as "scrap" or as "hot rolled steel coils with pitting and gouging" can be stated to be in "good order and condition". In the context of clause 52, therefore, the position is that if the description of the goods is such that the Master can sign a bill of lading that says that those goods, as described, are in "apparent good order and condition", then the cargo will not be "subject to clausing of the bill of lading". But if the Master would have to make a notation on the bill of lading so as to reconcile the description of the goods with a statement that they are in "apparent good order and condition", then the cargo is "subject to clausing of the bill of lading".

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