Carriage by Sea

There are two types of contract for carriage by sea. There are: Contracts evidenced by a bill of lading or similar document such a as sea waybill and Contracts contained in a charter party. If a cargo owner requires a whole ship (or a substantial part of it), he will hire it from the shipowner by way of a charter party. If he requires only shipping space in a ship, the terms of his contract with the carrier are normally stated in a bill of lading or similar document. Where the cargo owner requires only to ship his goods in the ship, the contract between himself and the shipper will, of course, be negotiated and agreed upon before the goods are actually carried down to the quayside and loaded on board the ship. It can be seen that the bill of lading cannot be the contract itself as between the cargo owner and shipowner; this has already been concluded. Of course, if there were no contract for the carriage of the goods by sea then there would be no necessity for the bill of lading to be completed and signed. Hence we say that the bill of lading is evidence of the contract and indeed the bill of lading is the best evidence available. By contrast, where the cargo owner requires to hire the ship (or a substantial part of it) and does so by way of the charter party then the legal position is that the charter party itself is the contract. No other extraneous evidence is admissible to prove the existence of alleged terms which are not contained in the charter party. This is the most significant contrast between the two types of contracts of carriage by sea. Where the contract for carriage is evidenced by a bill of lading (as opposed to being contained in the charter party) it is open to either party to adduce other evidence than what is contained in the bill of lading as to alleged terms incorporated into the contract.