Bills Of Lading 1 Notes

BILLS OF LADING (1)

((i) As Evidence of Contract or Contract (ii) As Receipt)

SUMMARY

• NOTE: A substantial part of this topic is about the evidential value of a B/L -> extent to which a carrier is bound by statements in the B/L, whether vis-à-vis the original shipper, or a subsequent endorsee

B/L as Evidence of Contract or Contract

• As between the carrier and the original shipper?

  • B/L is merely evidence (The Ardennes)

    • They made an oral contract to ship straight to London

    • But the B/L, when drawn up, permitted deviations

    • Court held they were BOUND by the oral contract -> B/L only evidenced the CoC

  • Although NOTE: the carrier can still try and argue that the subsequent B/L was a variation to the original oral CoC

    • But then he’d have to make out the elements for variation: consideration, intention etc

• As between the carrier and an indorsee?

  • B/L contains the contract of carriage (Leduc v Ward)

    • Almost the exact reversal of Ardennes, the carrier tried to rely on the original CoC to argue for deviations, but this was rejected, since the B/L contained the CoC vis-à-vis the endorsee

• Does COGSA alter the law on this point?

  • No, although s5(1)(a) is poorly drafted and looks as though it does

TWE is a carrier bound to the original shipper/indorsee by a false statement in the B/L

• <Most important question for this week>

• Two possible routes:

  • 1) Common law

    • Arguing estoppel by representation -> being bound by a statement of fact

  • 2) Statutory

    • Arts 3(3) and 3(4) HV

      • B/L is prima facie evidence of receipt by the carrier of the goods for the shipper

      • For a third party, it becomes conclusive evidence

      • Art 3(3) states what the shipper can demand from the carrier

      • But it does not limit what sort of binding statements can be made by the carrier

      • Otherwise 3(3) would have cut down a lot of the value of a B/L

      • Q: Must the B/L be issued in response to a demand then?

      • A: In the Martha K, the Court considered it would be ridiculous if the protections didn’t apply just because the carrier proactively issued the B/L as opposed to doing it in response to a demand

    • S4 COGSA

      • A bill of lading which—

      • (a)represents goods to have been shipped on board a vessel or to have been received for shipment on board a vessel; and

      • (b)has been signed by the master of the vessel or by a person who was not the master but had the express, implied or apparent authority of the carrier to sign bills of lading,

      • shall, in favour of a person who has become the lawful holder of the bill, be conclusive evidence against the carrier of the shipment of the goods or, as the case may be, of their receipt for shipment.

      • NOTE: only applies to third parties, not the original shipper

• NOTE: Always consider S4 first in a Problem QUestion!

1. The fact that the goods were shipped

• Original shipper

  • Common law (estoppel by representation)? NO

    • 1) Master has no authority to bind the carrier by the statement that goods were shipped (Grant v Norway)

    • 2) If no contract was made when booking shipping space, and goods weren’t even loaded, then there is no contract of carriage (Heskell problem)

      • If there is no contract of carriage, then this would be using estoppel as a sword, which is not allowed in English law

    • 3) Also hard to prove reliance

      • The shipper is on the ground, he should know whether the goods were shipped or not!

  • Statutory argument? NO

    • 1) Art 3(4) only makes the B/L prima facie evidence of receipt of the goods by the carrier for the original shipper, which is the original position anyway

    • 2) S4 COGSA only applies to subsequent lawful holders of the B/L (i.e. not the original shipper)

• Indorsee

  • Common law (estoppel by representation)? NO

  • Statutory argument? YES

    • 1) Art 3(4) HV applies -> but only if the H-V rules apply

      • If there is no contract of carriage, then H-V rules cannot apply

    • 2) S4 COGA should apply

      • Treitel has argued that S4 refers to a “carrier”, and you can’t have a carrier without a contract of carriage

      • But Peel: S4 was intended to get around the Heskell problem, so it would be odd if it were limited by the Heskell problem

2. The quantity of goods shipped (where some of the goods were shipped)

• Original shipper

  • Common law? NO

    • 1) Grant v Norway problem

    • 2) Reliance problem

  • Statutory argument? NO

    • Same as in (a)

• Indorsee

  • Common law? NO

    • Grant v Norway

  • Statutory argument? YES

    • If at least some goods were shipped, there is no Heskell problem

3. The mercantile quality of goods shipped

• NOTE: quality -> inherent quality (e.g. Grade 1 Argentinian beef)

  • Distinguish this from condition, Grade 1 beef that has spoilt is still Grade 1

• Original shipper

  • Common law? NO

    • Captain has no authority to bind shipowners as to quality of goods (Cox v Bruce)

  • Statutory argument? NO

    • Same as (a)

• Indorsee

  • Common law? NO

    • Same as above, Cox v Bruce

  • Statutory argument? NO

    • You cannot make statements as to quality binding against the carrier, because quality is simply not for the carrier to attest to!

    • Even if you could make the statement binding, there would be no cause of action!

    • Your cause of action would be against the seller for supplying you grade 2 beef instead of grade 1

    • It’s not anything the carrier has done that changed your beef from grade 1 to grade 2!

4. The identification marks on the goods shipped

• What is an identification mark?

  • Could be either (a) statement that the goods were shipped or (b) statement as to quantity!

  • Imagine a stamp saying “500 tons of Argentinian beef” and it’s actually pork instead!

    • Identification mark would be statement goods were shipped

  • Imagine stamp says “500 tons of beef” but only 200 tons were shipped

    • Identification mark would be statement of quantity

• Figure out what statement it is -> follow the analysis

  • For both (a) and (b), common law arguments will fail due to Grant v Norway problem

5. The “apparent order and condition” of the goods at the time of shipment

• Original shipper

  • Common...

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