Merchant Shipping Act

Rights under the contract of carriage do not depend on a person being a lawful holder of the delivery order, but merely on being identified in it as the person to whom delivery is to be made. Liabilities under the contract carriage may also be incurred by that person in the same way as by the lawful bill of lading holder and the person identified in the delivery order can become subject to the same liabilities under the contract as if he had been a party to that contract. Bills of lading commonly include a large number of contractual terms designed to regulate the relations between carrier and cargo-owner. The terms vary from company to company. Identity of Carrier.  In all bills of lading cases it will be necessary to identify the contracting parties. The contracting carrier will be apparent from the company name printed prominently on the bills of lading. A definition clause will be drafted generally merely referring the reader back to the face of the document and in particular to the signature provisions. The carrier could include general clauses in the bill of lading which seek to define which party actually is the carrier. One such clause is the demise clause. In England the un-amended Merchant Shipping Act 1894, section 503 allowed a shipowner but not a charterer to limit liability. Where there was a substantial loss of cargo or a total loss, a cargo-owners claim against the shipowner would be significantly reduced but a claim against the charterer would have succeeded in full. It was therefore in the interest of the charterers to make it clear that they were not the carriers liable under the contract and to direct cargo-owners to the shipowners. The demise clause served this purpose. The clause is a positive attempt to fix the shipowner with liability under the contract.