Chris Evan
The legal status and uses of the bill of lading[edit] Under the Hague-Visby rules, a bill of lading is only prima facie evidence of receipt. Section 4 the UK Carriage of Goods by Sea Act 1992 (which repealed and replace the Bills of Lading Act 1855 provides that a bill of lading is conclusive evidence of receipt (thus overturning the old rule in Grant v Norway (1851).
Section 1 the UK Carriage of Goods by Sea Act 1992 provides that a bill of lading must be negotiable. Also, it provides that a bill of lading includes a "received for shipment bill" (i.e. a B/L issued by a freight forwarder), and a B/L may be electronic.
As a receipt[edit] The principal use of the bill of lading is as a receipt issued by the carrier once the goods have been loaded onto the vessel. This receipt can be used as proof of shipment for customs and insurance purposes, and also as commercial proof of completing a contractual obligation, especially under Incoterms such as CFR ( Cost and freight ) and FOB-(free on board)
As evidence of the contract of carriage.[edit] The bill of lading will rarely be the contract itself, since the cargo space will have been booked previously, perhaps by telephone, email or letter. The preliminary contract will be acknowledged by both the shipper and carrier to incorporate the carrier's standard terms of business. If the Hague-Visby Rules apply, then all of the Rules will be automatically annexed to the bill of lading, thus forming a statutory contract.
As title[edit] The bill of lading confers prima facie title over the goods to the named consignee or lawful holder. Under the "nemo dat quod non habet" rule ("no-one may give what he ain't got"), a seller cannot not pass better title than he himself has; so if the goods are subject to an encumbrance (such as a mortgage, charge or hypotheque), or even stolen, the bill of lading will not grant full title to the holder.
As a negotiable document[edit] A bill of lading may be traded in much the same way as the cargo, and even borrowed against if desired. This is a very important and common document used in export and import trade globally.