Contract

Where a bill of lading is issued under a charter party it must be noted that the bill of lading ceases to be considered as evidence of this contract of carriage. In any contract of carriage which is contained in a charter party, it is the charter party itself which is the contract, and therefore the bill of lading in relation to this contract serves only as a document of title to the goods and as a receipt for the goods. It should be noted, however, that when the bill of lading is endorsed in favour of a third party, i.e. the indorsee, then there is at this point a new and second contract. In this situation the bill of lading is now considered as evidence of this second contract. Bills of lading are commonly expressed to incorporate the terms and conditions of the charter party under which the ship may be trading at the time of shipment of the goods. How and which provisions are in fact incorporated into the bill of lading depends largely on the wording used in the incorporating clause. The subject of incorporation has been given much judicial attention over the years and the present construction of incorporation clauses is taken on a narrow basis. Thus it is that only those clauses which are expressly incorporated into the bill of lading will be considered as being so incorporated. Where the goods have been shipped on a chartered ship the bills of lading often include a clause stating “all other conditions and exceptions as per charter party”. However, this clause will not incorporate provisions which are inconsistent with the bill of lading or which do not affect the consignee’s right to take delivery. A conclusive evidence clause is not considered by the Court to be an exception nor is it considered to be a condition to be performed by a consignee.