Contracts for the carriage of goods by sea are based upon the general Common Law principles of Contract Law. A party is involved in a non-contractual capacity his action will lie in tort (usually in the tort of negligence). Besides general contractual and tortious principles, there are specific rules relating to contracts which involve the carriage of goods by sea (COGS). Some of carriage of goods by sea rules are under Common Law, judicially developed to deal with the special nature of these types of contracts. However, many of carriage of goods by sea rules are statutory i.e. enacted by governments and often as a result of International Conventions.
Under common law, a common carrier is the carrier which is ready for hire to transport from place to place, either by land, sea or air, the goods of anyone or any passengers, wishing to employ the carrier. Carrier must do it as a business and not as a casual operation. Prominent feature of a common carrier is that if the carrier wrongly refuses to carry any goods or passengers, carrier may be sued for damages in tort. For example, the case Crouch & London v North Western Railway (1854) where the defendants who were common carriers by rail, refused to accept packed parcels from the plaintiffs who were themselves the carriers and who were under-cutting the defendants’ freight rates. Court held the defendants were liable for refusal to carry. Same outcome might prevail were a liner operator, who having declared himself as a common carrier, refuses to carry containers proffered by an NVOC (Non-Vessel Operating Carrier) who was able to offer better rates for LCL (Less than Container Load) cargo than the line itself.
Whether a carrier is a common carrier or private carrier depends on the circumstances. If the carrier holds himself out to all and sundry as being prepared to carry, he is a common carrier. If the carrier reserves to himself the right of accepting or rejecting offers of goods, whether carrier’s conveyances are full or empty, he is not a common carrier. It may be quite difficult to decide whether a carrier is common carrier or private carrier by a study of the legal principles governing this issue. However, in real shipping world, most carriers state in their conditions of carriage that they are not common carriers. Therefore, there is no need to do research if the carrier is common carrier or private carrier. Nowadays, although the courts in many jurisdictions do not regularly infer that a carrier is a common carrier, it should be remembered that common carriers are by no means extinct, especially in United States.