Terms of Carriage

When the holder of the bill of lading is not the charterer the question arises as to whether it is the shipowner or the charterer that he sues for damage to his cargo. In the large majority of cases the contract of carriage is made with the shipowner and not with the charterer. The bills of lading are usually issued by the Master who is normally the servant and agent of the owner. If goods are loaded on board a ship pursuant to a contract of carriage the normal inference is that the shipper has contracted with the shipowner. In the absence of any special circumstances the shipper may assume that the Master is the agent of the shipowner. The Master binds the shipowner even if a form is used which is not authorized by the charter party. If the shipper does know the terms of the charter party, he is or should be aware that to sign a bill of lading other than in the particular form is beyond the Master’s authority the shipowner will not be liable to the shipper but the charterer will. Occasionally, particularly in the liner trade, a charterer will issue his own B/L putting himself forward as the contractual carrier. In such circumstances the B/L holder will have a choice as to whom to sue for damages to his cargo.  In practice he will protect his interest against both parties The details to be found on the face of the B/L although varying slightly depending upon the type of B/L are self-evident.  Some of the clauses that will be found on the reverse side of the bill of lading have a particular legal significance. Liner operators over the years have sought to introduce into their bills of lading clauses which will give them as many rights and immunities as possible and in some circumstances such clauses will in fact constitute the terms of carriage under which the cargo is carried on the bill of lading.