Bill of Lading

Receipt

The carrier acknowledges having received goods, described as to quantity, marks, and apparent condition. What the carrier acknowledges is what it could observe — it does not certify what is inside a sealed container.

Evidence of the contract of carriage

It records the terms on which the goods are carried. The contract may have been concluded before the document was issued, which is why it is evidence of the contract rather than the contract itself.

Document of title

In negotiable form, the document represents the goods. Delivery is made against surrender of an original, and transferring the document transfers the right to take delivery.

The title function is not automatic — it depends on how the document is drawn and on the applicable law. A document made out to a named consignee without words of negotiability is not a document of title in the same sense: the carrier delivers to that consignee, and holding the paper is not what unlocks the cargo. A sea waybill goes further and is not a document of title at all, though it is a perfectly good receipt and contract evidence.

The differences between bills matter mainly because banks and buyers care about them, and because a document that is unimpeachable in one transaction is unusable in another.

Order or bearer bill

Drawn so as to be transferable by endorsement or by delivery. This is the negotiable form on which sales afloat and documentary finance depend.

Straight bill

Consigned to a named party without words of negotiability. It is not intended to be traded on, and its treatment as a document of title varies by legal system.

Sea waybill

A non-negotiable transport document. Delivery is to the named consignee on identification, without surrender of a document — convenient for short voyages and for parties who do not need document control.

Shipped on board versus received for shipment

The first evidences that goods were actually loaded onto a named vessel; the second only that the carrier took them into its charge. Credits frequently require the former.

Clean versus claused

A clean document carries no notation of defective condition or packaging. A clause noting apparent damage generally makes the document unacceptable under a credit requiring a clean one.

Master and house documents

Where a forwarder consolidates cargo, the carrier issues a document to the forwarder and the forwarder issues its own to each shipper. They describe different contracts with different parties.

Bulk commodity trade is where the document’s title function does its heaviest work. A cargo of grain may be sold several times between loading and discharge, and each sale is effected by transferring documents rather than goods. The parcel never changes course; the paper does.

• Description of bulk cargo is by quantity and marks, with the carrier’s acknowledgment limited to what it could observe
• The document typically records weight at loading, which is not the weight at discharge — a difference the contract, not the document, resolves
• A cargo sold afloat moves by endorsement, so the document set must remain complete and consistent through each transfer
• Where a credit requires an on-board notation, the document’s form is a payment issue and not only a shipping one
• Delivery against an original means a cargo can arrive before its documents do, which is a practical problem with its own commercial machinery

The last point is a genuine friction in fast trades. Where the vessel outruns the paperwork, the goods are at the port and the party entitled to them cannot produce the document that unlocks them. The arrangements used to deal with this are commercial and legal instruments with real consequences for the parties who give and accept them, and they are outside the scope of a reference entry.

What a carrier is answerable for, and to what extent, is not determined by the bill of lading alone. International conventions on the carriage of goods by sea establish regimes of liability, and which applies to a given contract depends on the route, the contract, and the law governing it. Different conventions are in force in different states, and the resulting patchwork is a matter for the parties’ lawyers rather than for a reference page.

Electronic bills of lading have been developed to remove the physical paper from a process that manifestly does not need it, and legal frameworks for recognising electronic transferable records have been advanced to give them effect. Whether an electronic document has the legal attributes of a paper original in a given jurisdiction depends on that jurisdiction’s law and on the system used. Adoption is uneven, and the question of legal equivalence is not settled uniformly.