“laden” in reference to a vessel loaded with cargo. In due course, the shipowner, to
expand his business, made his ship available for the carriage of cargo belonging to
other merchants who required from him a receipt for the goods shipped on board.
The book of lading as record of cargo in and out of the ship was the pre-curser of the
modern cargo manifest. In time, both the shipowner and the merchants ceased to
travel on the ship and the book gave way to a “bill” in the fourteenth century.
Excerpts from the book were delivered to the shipper in the form of a bill which was
the progenitor of the modern bill of lading. The practice of a separate document
representing a receipt, and later, an embodiment of the terms of the contract for the
transportation and delivery of the goods, became a part of the commercial codes of
continental Europe and the English common law. This was the origin of the bill of
lading as it is known today in terms of its two characteristics, namely, serving as a
receipt and as evidence of a contract of a carriage.
The function and purpose of a bill of lading was examined by the Shipping
Committee of the United Nations Conference on Trade and Development
(UNCTAD) through a Working Group established for that purpose in 1969. Through
the deliberations of this Committee, the definition of “bill of lading” was established
as a document evidencing the loading of goods on a ship.
1 At any rate, the extant
form of bill of lading is, first of all, described as a receipt issued by the carrier to the
shipper acknowledging the shipment of goods on a particular vessel destined for a
specific port or received for shipment in the custody of the shipowner. This function
of the document also describes the condition and quantity of the cargo when shipped.
Secondly, the bill of lading is a memorandum of the terms of the contract of carriage
which in effect is evidence of it, assuming that the contract itself would have been
entered into at an earlier date. Thirdly, the bill of lading is a so-called “document of
title” enabling the receiver or the consignee to take the delivery of the goods at their
destination. Alternatively, the holder of the bill can, by endorsement, assign the bill
of lading to another entity regardless of the fact that the goods itself are not
physically in his possession but is in the carrier’s custody.
2 Originally, the bill of
lading only operated as a straight bill; in other words, as a document that was not
negotiable such as in the case of a waybill. Subsequently, the practice of negotiability of a bill of lading became entrenched in maritime commerce and remains the
prevailing position today.
The transactional pattern of trade is manifested through the co-existence of two
commercial contracts, namely, the contract of sale respecting the goods and the
contract of carriage, together signifying a trilateral legal relationship. The seller/
shipper contracts with the buyer/consignee which is effectuated through the contract
of carriage with the carrier. Incidentally, credit for financing of the transaction is
provided by the bank through the mechanism of a letter of credit.
3
1 Ibid, p. 299.
2 Ibid, p. 300.
3 Ibid.
414
H. Liu
expand his business, made his ship available for the carriage of cargo belonging to
other merchants who required from him a receipt for the goods shipped on board.
The book of lading as record of cargo in and out of the ship was the pre-curser of the
modern cargo manifest. In time, both the shipowner and the merchants ceased to
travel on the ship and the book gave way to a “bill” in the fourteenth century.
Excerpts from the book were delivered to the shipper in the form of a bill which was
the progenitor of the modern bill of lading. The practice of a separate document
representing a receipt, and later, an embodiment of the terms of the contract for the
transportation and delivery of the goods, became a part of the commercial codes of
continental Europe and the English common law. This was the origin of the bill of
lading as it is known today in terms of its two characteristics, namely, serving as a
receipt and as evidence of a contract of a carriage.
The function and purpose of a bill of lading was examined by the Shipping
Committee of the United Nations Conference on Trade and Development
(UNCTAD) through a Working Group established for that purpose in 1969. Through
the deliberations of this Committee, the definition of “bill of lading” was established
as a document evidencing the loading of goods on a ship.
1 At any rate, the extant
form of bill of lading is, first of all, described as a receipt issued by the carrier to the
shipper acknowledging the shipment of goods on a particular vessel destined for a
specific port or received for shipment in the custody of the shipowner. This function
of the document also describes the condition and quantity of the cargo when shipped.
Secondly, the bill of lading is a memorandum of the terms of the contract of carriage
which in effect is evidence of it, assuming that the contract itself would have been
entered into at an earlier date. Thirdly, the bill of lading is a so-called “document of
title” enabling the receiver or the consignee to take the delivery of the goods at their
destination. Alternatively, the holder of the bill can, by endorsement, assign the bill
of lading to another entity regardless of the fact that the goods itself are not
physically in his possession but is in the carrier’s custody.
2 Originally, the bill of
lading only operated as a straight bill; in other words, as a document that was not
negotiable such as in the case of a waybill. Subsequently, the practice of negotiability of a bill of lading became entrenched in maritime commerce and remains the
prevailing position today.
The transactional pattern of trade is manifested through the co-existence of two
commercial contracts, namely, the contract of sale respecting the goods and the
contract of carriage, together signifying a trilateral legal relationship. The seller/
shipper contracts with the buyer/consignee which is effectuated through the contract
of carriage with the carrier. Incidentally, credit for financing of the transaction is
provided by the bank through the mechanism of a letter of credit.
3
1 Ibid, p. 299.
2 Ibid, p. 300.
3 Ibid.
414
H. Liu