MARENG 3
UNIT 2
Below you will find a list of the vocabulary that has to be researched for the test of Unit 2,followed by additional research material that should be used, all in preparation for your test of Unit 2.
The Hague The Hague
HAGUE
RULES
Main types of bill
Straight bill of lading
Order bill of lading
Bearer bill of lading
Surrender bill of lading
A sample of the issues
Group F – Main carriage unpaid
Group C – Main carriage paid
Group D – Arrival
Summary of terms
VOCABULARY
The Harter Act
The Harter Act
Surrender
bill of lading
Straight
bill of lading
Order
bill of lading
Incoterms
FOB – Free on board
FCA – Free Carrier
FAS – Free Alongside Ship
DES – Delivered Ex Ship
DEQ – Delivered Ex Quay
DDU – Delivered Duty Unpaid
DDP – Delivered Duty Paid
DAF – Delivered At Frontier
CPT – Carriage Paid To
CIP – Carriage and Insurance Paid
CIF – Cost, Insurance and Freight
CFR – Cost and Freight
Carriage of
Goods by Sea Act
bill of lading
bill of lading
Bearer
bill of lading
RESEARCH MATERIAL
Unit 2 Carriage of Goods under Bills of Lading
THE CARRIAGE OF GOODS BY SEA ACT OF 1936
Carriage of Goods by Sea Act of 1936 was meant to be a marked
improvement on The
Harter Act of 1893. COGSA governs all shipping
involving American ports. Its purpose is to protect shippers
from liability if cargo is damaged. If stated in the bill
of lading,
it can also apply to domestic shipping, this has become standard. Unlike Harter, where goods are the responsibility of the shipper from pier to pier, COGSA states
that the shipper is responsible only while the cargo is on the ship, being
loaded or, being unloaded. Like Harter, COGSA includes a list of immunities if
damage results in certain situations. With these immunities comes some responsibility. There are several
specific limitations in COGSA to further protect shippers from
undue litigation. If the cargo is
damaged, the claimant has one year from the stated delivery date on
the bill of lading to proceed with litigation. Also, the complaint must be filed no later
than three days from the date of delivery of the cargo. The Hague has recognized COGSA and has implemented it
as the de-facto international standard.
Unfortunately, the act is to long to copy and annotate here, so I will
summarize. There are 17 situations in which the shipper is not responsible for
damage to the cargo.
Errors in navigation.
Fires caused by non-malicious forces or accidents
on the part of the shipper.
Perils of the Sea.
Seizure by customs or legal authorities.
Quarantine restrictions.
Act or omission of the shipper. This is an ambiguous catch-all phrase, still open to
interpretation.
Strikes and lockouts. When stevedores are unable to unload a ship, damage can be
caused to many goods, such as fruit, coffee, and frozen goods.
Riots and looting.
Previous damage, inherent defects, and low quality.
Bad packaging. For instance, when containerization came about, the
responsibility for packing containers fell to the manufacturer. If a container full of computers was packed loosely, the
computers would slide into each other at sea and break.
Any other damage to the product not caused by the shipper. This is the
catch-all phrase.
The above 17 immunities can be enjoyed only if four conditions are met.
The ship must be manned and equipped properly.
The spaces in which the cargo is stored must be safe and proper for the
cargo. This means that ammunition is not to be stored next to the boilers.
There are several court cases that have further defined and shaped the
current implementation of COGSA.
The US courts established that any litigation involving COGSA would have to be in US courts unless the two parties agreed to another
location. In Indussa Corporation vs. The Ranborg, the bill of lading
designated Dutch courts as the place for
all litigation involving the cargo on that bill. The US court overturned that,
saying US courts could not be discluded as a location for COGSA litigation.
In Riverstone Meat Company vs. Lancashire Shipping Company, a
shipyard forgot to replace a valve cover. The cargo in one hold ended up soaked in seawater. The fault
was deemed to lie with the ship owner for not exercising due diligence in
preventing an obvious mistake. This is related to the seaworthiness
requirement.
In Mississippi Shipping Company vs. Zander and Company, The DelSud
grazed a pier. This happened while the ship was being tugged out. At the time, the crew and captain weren't on deck, as the harbor pilot had responsibility for the boat. The cargo
was damaged by leaking seawater. The court said that the shipper was NOT
liable, because the voyage had commenced, and it was an error in navigation, not a seaworthiness issue.
I used the venerable resource Marine Cargo
Operations, 2nd Ed. by Saurbier and Meurn for the above information
The Carriage of Goods by Sea Act (1936)
(COGSA)
46 United States Code §§ 1300-1315
1301 Defenitions.
When used in this chapter --
(a) The term "carrier" includes the owner or the charterer who
enters into a contract of carriage with a shipper.
(b) The term "contract of carriage" applies only to contracts
of carriage covered by a bill of lading or any similar document of title,
insofar as such document relates to the carriage of goods by sea, including any
bill of lading or any similar document as aforesaid issued under or pursuant to
a charter party from the moment at which such bill of lading or similar document
of title regulates the relations between a carrier and a holder of the same.
(c) The term "goods" includes goods, wares, merchandise, and
articles of every kind whatsoever, except live animals and cargo which by the
contract of carriage is stated as being carried on deck and is so carried.
(d) The term "ship" means any vessel used for the carriage
goods by sea.
(e) The term "carriage of goods" covers the period from the
time when the goods are loaded on to the time when they are discharged from the
ship.
Subject to the provisions of section 1306 of this title, under every
contract of carriage of goods by sea, the carrier in relation to the loading,
handling, stowage, carriage, custody, care, and discharge of such goods, shall
be subject to the responsibilities and liabilities and entitled to the rights
and immunities set forth in sections 1303 and 1304 of this title.
1303 Responsibilities of carrier and ship.
Seaworthiness.
The carrier shall be bound, before and at the beginning of the voyage,
to exercise due diligence to :
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship;
(c) Make the holds, refrigerating and cooling chambers, and all other
parts of the ship in which goods are carried, fit and safe for their reception,
carriage, and preservation.
Cargo.
The carrier shall properly and carefully load, handle, stow, carry,
keep, care for, and discharge the goods carried.
Contents of bill.
After receiving the goods into his charge the carrier, or the master or
agent of the carrier, shall, on demand of the shipper, issue to the shipper a
bill of lading showing among other things :
(a) The leading marks necessary for identification of the goods as the
same are furnished in writing by the shipper before the loading of such goods
starts, provided such marks are stamped or otherwise shown clearly upon the
goods if uncovered, or on the cases or coverings in which such goods are
contained, in such a manner as should ordinarily remain legible until the end
of the voyage.
(b) Either the number of packages or pieces, or the quantity or weight,
as the case may be, as furnished in writing by the shipper.
(c) The apparent order and condition of the goods: Provided. That no
carrier, master, or agent of the carrier, shall be bound to state or show in
the bill of lading any marks, number, quantity, or weight which he has
reasonable ground for suspecting not accurately to represent the goods actually
received, or which he has had no reasonable means of checking.
Bill as prima facie evidence.
Such a bill of lading shall be prima facie evidence of the receipt by
the carrier of the goods as therein described in accordance with paragraphs
(3)(a), (b), and (c), of this section: Provided, That nothing in this chapter
shall be construed as repealing or limiting the application of any part of
sections 81 to 124 of Title 49.
Guaranty of statements.
The shipper shall be deemed to have guaranteed to the carrier the
accuracy at the time of shipment of the marks, number, quantity, and weight, as
furnished by him; and the shipper shall indemnify the carrier against all loss,
damages, and expenses arising or resulting from inaccuracies in such
particulars. The right of the carrier to such indemnity shall in no way limit
his responsibility and liability under the contract of carriage to any person
other than the shipper.
Notice of loss or damage; limitation of actions.
Unless notice of loss or damage and the general nature of such loss or damage
be given in writing to the carrier or his agent at the port of discharge before
or at the time of the removal of the goods into the custody of the person
entitled to delivery thereof under the contract of carriage, such removal shall
be prima facie evidence of the delivery by the carrier of the goods as
described in the bill of lading. If the loss or damage is not apparent, the
notice must be given within three days of the delivery.
Said notice of loss or damage may be endorsed upon the receipt for the
goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at
the time of their receipt been the subject of joint survey or inspection.
In any event the carrier and the ship shall be discharged from all
liability in respect of loss or damage unless suit is brought within one year
after delivery of the goods or the date when the goods should have been
delivered: Provided, That if a notice of loss or damage, either apparent or
concealed, is not given as provided for in this section, that fact shall not
affect or prejudice the right of the shipper to bring suit within one year
after the delivery of the goods or the date when the goods should have been
delivered.
In the case of any actual or apprehended loss or damage the carrier and
the receiver shall give all reasonable facilities to each other for inspecting
and tallying the goods.
"Shipped" bill of
lading.
After the goods are loaded the bill of lading to be issued by the
carrier, master, or agent of the carrier to the shipper shall, if the shipper
so demands, be a "shipped" bill of lading: Provided, That if the
shipper shall have previously taken up any document of title to such goods, he
shall surrender the same as against the issue of the "shipped" bill
of lading, but at the option of the carrier such document of title may be noted
at the port of shipment by the carrier, master, or agent with the name or names
of the ship or ships upon which the goods have been shipped and the date or dates
of shipment, and when so noted the same shall for the purpose of this section
be deemed to constitute a "shipped" bill of lading.
Limitation of liability for negligence.
Any clause, covenant, or agreement in a contract of carriage relieving
the carrier or the ship from liability for loss or damage to or in connection
with the goods, arising from negligence, fault, or failure in the duties and
obligations provided in this section, or lessening such liability otherwise
than as provided in this chapter, shall be null and void and of no effect. A
benefit of insurance in favor of the carrier, or similar clause, shall be
deemed to be a clause relieving the carrier from liability.
Unseaworthiness.
Neither the carrier nor the ship shall be
liable for loss or damage arising or resulting from unseaworthiness unless
caused by want of due diligence on the part of the carrier to make the ship
seaworthy, and to secure that the ship is properly manned, equipped, and
supplied, and to make the holds, refrigerating and cool chambers, and all other
parts of the ship in which goods are carried fit and safe for their reception,
carriage, and preservation in accordance with the provisions of paragraph (1)
of section 1303 of this title. Whenever loss or damage has resulted from
unseaworthiness, the burden of proving the exercise of due diligence shall be
on the carrier or other persons claiming exemption under this section.
Uncontrollable causes of loss.
Neither the carrier nor the ship shall be
responsible for loss or damage arising or resulting from&emdash;
(a) Act, neglect, or default of the master,
mariner, pilot, or the servants of the carrier in the navigation or in the
management of the ship;
(b) Fire, unless caused by the actual fault or
privily of the carrier;
(c) Perils, dangers, and accidents of the sea
or other navigate] waters;
(d) Act of God;
(e) Act of war;
(f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or
people, or seizur under legal process;
(h) Quarantine restrictions
(i) Act or omission of the shipper or owner of
the goods, his agent or representative;
(j) Strikes or lockouts or stoppage or
restraint of labor from whatever cause, whether partial or general: Provided,
That nothing herein contained shall be construed to relieve a carrier from
responsibility for the carrier's own acts;
(k) Riots and civil commotions;
(l) Saving or attempting to save life or
property at sea;
(m) Wastage in bulk or weight or any other
loss or damage arising from inherent defect, quality, or vice of the goods;
(n) Insuffciency of packing;
(o) Insuffciency or inadequacy of marks;
(p) Latent defects not discoverable by due
diligence; and
(q) Any other cause arising without the actual
fault and privily of the carrier and without the fault or neglect of the agents
or servants of the carrier, but the burden of proof shall be on the person
claiming the benefit of this exception to show that neither the actual fault or
privily of the carrier nor the fault or neglect of the agents or servants of
the carrier contributed to the loss or damage.
Freedom from negligence.
The shipper shall not be responsible for loss
or damage sustained by the carrier or the ship arising or resulting from any
cause without the act, fault, or neglect of the shipper, his agents, or his
servants.
Deviations.
Any deviation in saving or attempting to save
life or property at sea, or any reasonable deviation shall not be deemed to be
an infringement or breach of this chapter or of the contract of carriage, and
the carrier shall not be liable for any loss or damage resulting therefrom:
Provided, however, That if the deviation is for the purpose of loading or
unloading cargo or passengers it shall, prima facie, be regarded as
unreasonable.
Amount of liability; Valuation of cargo.
Neither the carrier nor the ship shall in any
event be or become liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package lawful money of
the United States, or in case of goods not shipped in packages, per customary
freight unit, or the equivalent of that sum in other currency, unless the
nature and value of such goods have been declared by the shipper before
shipment and inserted in the bill of lading. This declaration, if embodied in
the bill of lading, shall be prima facie evidence, but shall not be conclusive
on the carrier.
By agreement between the carrier, master, or
agent of the carrier, and the shipper another maximum amount than that
mentioned in this paragraph may be fixed: Provided, that such maximum shall not
be less than the figure above named. In no event shall the carrier be liable
for more than the amount of damage actually sustained.
Neither the carrier nor the ship shall be
responsible in any event for loss or damage to or in connection with the
transportation of the goods if the nature or value thereof has been knowingly
and fraudulently misstated by the shipper in the bill of lading.
Inflammable, explosive, or dangerous cargo.
Goods of an inflammable, explosive, or
dangerous nature to the shipment whereof the carrier, master or agent of the
carrier, has not consented with knowledge of their nature and character, may at
any time before discharge be landed at any place or destroyed or rendered
innocuous by the carrier without compensation, and the shipper of such goods
shall be liable for all damages and expenses directly or indirectly arising out
of or resulting from such shipment. If any such goods shipped with such
knowledge and consent shall become a danger to the ship or cargo, they may in
like manner be landed at any place, or destroyed or rendered innocuous by the
carrier without liability on the part of the carrier except to general average,
if any.
1305 Surrender of rights; increase of liabilities; charter parties;
general average.
A carrier shall be at liberty to surrender in whole or in part all or
any of his rights and immunities or to increase any of his responsibilities and
liabilities under this chapter, provided such surrender or increase shall be
embodied in the bill of lading issued to the shipper.
The provisions of this chapter shall not be applicable to charter
parties; but if bills of lading are issued in the case of a ship under a
charter party, they shall comply with the terms of this chapter. Nothing in
this chapter shall be held to prevent the insertion in a bill of lading of any
lawful provision regarding general average.
1306 Special agreement as
to particular goods.
Notwithstanding the
provisions of sections 1303 to 1305 of this title, a carrier, master or agent
of the carrier, and a shipper shall, in regard to any particular goods be at
liberty to enter into any agreement in any terms as to the responsibility and
liability of the carrier for such goods, and as to the rights and immunities of
the carrier in respect of such goods, or his obligation as to seaworthiness (so
far as the stipulation reBarding seaworthiness is not contrary to public
policy), or the care or diligence of his servants or agents in regard to the
loading, handling, stowage, carriage, custody, care, and discharge of the goods
carried by sea: Provided, That in this case no bill of lading has been or shall
be issued and that the terms agreed shall be embodied in a receipt which shall
be a nonnegotiable document and shall be marked as such.
Any agreement so entered
into shall have full legal effect: Provided, That this section shall not apply
to ordinary commercial shipments made in the ordinary course of trade but only
to other shipments where the character or condition of the property to be
carried or the circumstances, terms, and conditions under which the carriage is
to be performed are such as reasonably to justify a special agreement.
1307 Agreement as to liability prior to loading or after discharge.
Nothing contained in this chapter shall prevent a carrier or a shipper
from entering into any agreement, stipulation, condition, reservation, or
exemption as to the responsibility and liability of the carrier or the ship for
the loss or damage to or in connection with the custody and care and handling
of goods prior to the loading on and subsequent to the discharge from the ship
on which the goods are carried by sea.
1308 Rights and
liabilities under other provisions.
The provisions of this
chapter shall not affect the rights and obligations of the carrier under the
provisions of the Shipping Act, 1916, or under the provisions of sections 175,
181 to 183, and 183b to 188 of this title or any amendments thereto; or under
the provisions of any other enactment for the time being in force relating to
the limitation of the liability of the owners of seagoing vessels.
Nothing contained in this
chapter shall be construed as permitting a common carrier by water to
discriminate between competing shippers similarly placed in time and
circumstances, either (a) with respect to their right to demand and receive
bills of lading subject to the provisions of this chapter; or (b) when issuing
such bills of lading, either in the surrender of any of the carrier's rights
and immunities or in the increase of any of the carrier's responsibilities and
liabilities pursuant to section 1305 of this title; or (c) in any other way
prohibited by the Shipping Act, 1916, as amended
Where under the customs
of any trade the weight of any bulk cargo inserted in the bill of lading is a
weight ascertained or accepted by a third party other than the carrier or the
shipper, and the fact that the weight is so ascertained or accepted is stated
in the bill of lading, then, notwithstanding anything in this chapter, the bill
of lading shall not be deemed to be prima facie evidence against the carrier of
the receipt of goods of the weight so inserted in the bill of lading, and the
accuracy thereof at the time of shipment shall not be deemed to have been
guaranteed by the shipper.
Nothing in this chapter
shall be construed as superseding any part of sections 190 to 196 of this
title, or of any other law which would be applicable in the absence of this
chapter, insofar as they relate to the duties, responsibilities, and
liabilities of the ship or carrier prior to the time when the goods are loaded on
or after the time they are discharged from the ship.
This chapter shall apply
to al1 contracts for carriage of goods by sea to or from ports of the United
States in foreign trade. As used in this chapter the term "United
States" includes its districts, territories, and possessions. The term
"foreign trade" means the transportation of goods between the ports
of the United States and ports of foreign countries. Nothing in this chapter
shall be held to apply to contracts for carriage of goods by sea between any
port of the United States or its possessions, and any other port of the United
States or its possessions: Provided, however, That any bill of lading or
similar document of title which is evidence of a contract for the carriage of
goods by sea between such ports, containing an express statement that it shall
be subject to the provisions of this chapter, shall be subjected hereto as
fully as if subject hereto by the express provisions of this chapter:
Providedfurther, That every bill of lading or similar document of title which
is evidence of a contract for the carriage of goods by sea from ports of the
United States, in foreign trade, shall contain a statement that it shall have
effect subject to the provisions of this chapter.
1313 Suspension of
provisions by President.
Upon the certification of
the Secretary of Commerce that the foreign commerce of the United States in its
competition with that of foreign nations is prejudiced by the provisions, or
any of them of sections 1301 to 1308 of this title, or by the laws of any
foreign country or countries relating to the carriage of goods by sea, the
President of the United States may, from time to time, by proclamation, suspend
any or all provisions of said sections for such periods of time or indefinitely
as may be designated in the proclamation. The President may at any time rescind
such suspension of said sections, and any provisions thereof which may have
been suspended shall thereby be reinstated and again apply to contracts
thereafter made for the carriage of goods by sea. Any proclamation of
suspension or rescission of any such suspension shall take effect on a date
named therein, which date shall be not less than ten days from the issue of the
proclamation.
Any contract for the
carriage of goods by sea, subject to the provisions of this chapter, effective
during any period when sections 1301 to 1308 of this title, or any part
thereof, are suspended, shall be subject to all provisions of law now or
hereafter applicable to that part of said sections which may have thus been
suspended.
1314 Effective date;
retroactive effect.
This chapter shall take
effect ninety days after April 16, 1936; but nothing in this chapter shall
apply during a period not to exceed one year following April 16, 1936, to any
contract for the carriage of goods by sea, made before April 16, 1936, nor to
any bill of lading or similar document of title issued, whether before or after
such date in pursuance of any such contract as aforesaid.
THE HARTER ACT OF
1893
The Harter Act was designed
to protect American shipping companies from liability
involving damaged or lost cargo. English
companies were allowed to add clauses to the bills of lading
that protected them from responsibility in certain events if goods were
damaged. The Harter act was designed to give the same protection to American
shippers. It only applies to domestic shipping. If applies to international
shipping, the Harter act must be mentioned in the bill of lading. So, The
Harter Act:
If the owner of any vessel
transporting merchandise or property to or from any port in the United States of America shall exercise due diligence to
make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel, her
owner or owners, agent, or charterers, shall become or be held responsible for
damage or loss resulting from faults or errors in navigation or in the management of said vessel nor shall the vessel, her owner or owners, charterers, agent, or master be held liable for losses
arising from dangers of the sea or other navigable waters, acts of God, or public enemies, or the
inherent defect, quality, or vice of the thing carried, or from insufficiency
of package, or seizure under legal process, or for loss resulting from any act or omission of the shipper
or owner of the goods, his agent or representative, or from saving or
attempting to save life or property at sea, or from any deviation in rendering
such service.
Source: verbatim
from the US Code ch. 105, Sec. 3, 27 Stat. 445. as found in 1893, the year of
passage of the act.
In essence
the law makes the following points in protecting ship owners from liability.
The following circumstances are those that the shipper is not liable for if damage
or loss occurs to the cargo:
Four circumstances were recognised
by everyone before the passage of the act:
The following are specific to the
Harter Act only:
·
Acts or omissions by the shipper.
Harter Act 1893
Act of February 13, 1893, Chap.105, 27 Stat.
445-46,
46 U.S. Code Appendix 190-196
Sec.190. Stipulations
relieving from liability for negligence
It shall not be lawful
for the manager, agent, master, or owner of any vessel transporting merchandise
or property from or between ports of the United States and foreign ports to
insert in any bill of lading or shipping document any clause, covenant, or
agreement whereby it, he, or they shall be relieved from liability for loss or
damage arising from negligence, fault, or failure in proper loading, stowage,
custody, care, or proper delivery of any and all lawful merchandise or property
committed to its or their charge. Any and all words or clauses of such import
inserted in bills of lading or shipping receipts shall be null and void and of
no effect.
Sec.191. Stipulations
relieving from exercise of due diligence in equipping vessels
It shall not be lawful
for any vessel transporting merchandise or property from or between ports of
the United States of America and foreign ports, her owner, master, agent, or
manager, to insert in any bill of lading or shipping document any covenant or
agreement whereby the obligations of the owner or owners of said vessel to
exercise due diligence [1] properly equip, man, provision, and outfit said
vessel, and to make said vessel seaworthy and capable of performing her
intended voyage, or whereby the obligations of the master, officers, agents, or
servants to carefully handle and stow her cargo and to care for and properly
deliver same, shall in any wise be lessened, weakened, or avoided.
Sec.192. Limitation of
liability for errors of navigation, dangers of sea and acts of God
If the owner of any
vessel transporting merchandise or property to or from any port in the
United States of America shall exercise due diligence to make the said vessel
in all respects seaworthy and properly manned, equipped, and supplied, neither
the vessel, her owner or owners, agent, or charterers, shall become or be held
responsible for damage or loss resulting from faults or errors in navigation or
in the management of said vessel nor shall the vessel, her owner or owners,
charterers, agent, or master be held liable for losses arising from dangers of
the sea or other navigable waters, acts of God, or public enemies, or the
inherent defect, quality, or vice of the thing carried, or from insufficiency
of package, or seizure under legal process, or for loss resulting from any act
or omission of the shipper or owner of the goods, his agent or representative,
or from saving or attempting to save life or property at sea, or from any
deviation in rendering such service.
Sec.193. Bills of lading to be issued; contents
It
shall be the duty of the owner or owners, masters, or agents of any vessel
transporting merchandise or property from or between ports of the United States
and foreign ports to issue to shippers of any lawful merchandise a bill of
lading, or shipping document, stating, among other things, the marks necessary
for identification, number of packages, or quantity, stating whether it be
carrier’s or shipper’s weight, and apparent order or condition of such
merchandise or property delivered to and received by the owner, master, or
agent of the vessel for transportation, and such document shall be prima facie
evidence of the receipt of the merchandise therein described.
Sec.194. Penalties; liens;
recovery
For
a violation of any of the provisions of sections 190 to 196 of this Appendix
the agent, owner, or master of the vessel guilty of such violation, and who
refuses to issue on demand the bill of lading herein provided for, shall be
liable to a fine not exceeding $2,000. The amount of the fine and costs for
such violation shall be a lien upon the vessel, whose agent, owner, or master
is guilty of such violation, and such vessel may be libeled therefor in any
district court of the United States, within whose jurisdiction the vessel may
be found. One-half of such penalty shall go to the party injured by such
violation and the remainder to the Government of the United States.
Sec.195. Certain provisions inapplicable to transportation of live
animals
Sections
190 and 193 of this Appendix shall not apply to the transportation of live
animals.
Sec.196. Certain laws
unaffected
Sections
190 to 196 of this Appendix shall not be held to modify or repeal sections 181
to 183 of this Appendix, or any other statute defining the liability of
vessels, their owners, or representatives.
International
Convention for the Unification of Certain Rules of Law relating to Bills of
Lading ("Hague Rules"), and Protocol of Signature
(Brussels, 25 August 1924)
International 1922 convention at The Hague (Netherlands) that established standard basic obligations and responsibilities of the shipper and ocean-carrier for goods covered under a bill of lading. These rules were the result of widespread dissatisfaction among shippers and their insurers with arbitrary restrictions imposed by carriers to limit their liability in case of loss of, or damage to, cargo. These rules are followed by some 90 percent of nations and (after some changes) the US adopted them in 1936 as Carriage Of Goods By Sea Act (COGSA).
The
President of the German Republic, the President of the Argentine Republic, His
Majesty the King of the Belgians, the President of the Republic of Chile, the
President of the Republic of Cuba, His Majesty the King of Denmark and Iceland,
His Majesty the King of Spain, the Head of the Estonian State, the President of
the United States of America, the President of the Republic of Finland, the
President of the French Republic, His Majesty the King of the United Kingdom of
Great Britain and Ireland and of the British Dominions beyond the Seas, Emperor
of India, His Most Supreme Highness the Governor of the Kingdom of Hungary, His
Majesty the King of Italy, His Majesty the Emperor of Japan, the President of
the Latvian Republic, the President of the Republic of Mexico, His Majesty the
King of Norway, Her Majesty the Queen of the Netherlands, the President of the
Republic of Peru, the President of the Polish Republic, the President of the
Portuguese Republic, His Majesty the King of Romania, His Majesty the King of
the Serbs, Croats and Slovenes, His Majesty the King of Sweden, and the
President of the Republic of Uruguay,
HAVING RECOGNIZED the utility of fixing by agreement
certain uniform rules of law relating to bills of lading,
HAVE DECIDED to conclude a convention with this
object and have appointed the following Plenipotentiaries:
WHO, duly authorized thereto, have agreed as follows:
Article
1
In
this Convention the following words are employed with the meanings set out
below:
(a)
"Carrier" includes the owner or the charterer who enters into a
contract of carriage with a shipper.
(b)
"Contract of carriage" applies only to contracts of carriage covered
by a bill of lading or any similar document of title, in so far as such
document relates to the carriage of goods by sea, including any bill of lading
or any similar document as aforesaid issued under or pursuant to a charter
party from the moment at which such bill of lading or similar document of title
regulates the relations between a carrier and a holder of the same.
(c)
"Goods" includes goods, wares, merchandise and articles of every kind
whatsoever except live animals and cargo which by the contract of carriage in
stated as being carried on deck and is so carried.
(d)
"Ship" means any vessel used for the carriage of goods by sea.
(e)
"Carriage of goods" covers the period from the time when the goods
are loaded on to the time they are discharged from the ship.
Article
2
Subject
to the provisions of Article 6, under every contract of carriage of goods by
sea the carrier, in relation to the loading, handling, stowage, carriage,
custody, care and discharge of such goods, shall be subject to the
responsibilities and liabilities, and entitled to the rights and immunities
hereinafter set forth.
Article
3
1.
The carrier shall be bound before and at the beginning of the voyage to
exercise due diligence to:
(a)
Make the ship seaworthy.
(b)
Properly man, equip and supply the ship.
(c)
Make the holds, refrigerating and cool chambers, and all other parts of the
ship in which goods are carried, fit and safe for their reception, carriage and
preservation.
2.
Subject to the provisions of Article 4, the carrier shall properly and
carefully load, handle, stow, carry, keep, care for, and discharge the goods
carried.
3.
After receiving the goods into his charge the carrier or the master or agent of
the carrier shall, on demand of the shipper, issue to the shipper a bill of
lading showing among other things:
(a)
The leading marks necessary for identification of the goods as the same are
furnished in writing by the shipper before the loading of such goods starts,
provided such marks are stamped or otherwise shown clearly upon the goods if
uncovered, or on the cases or coverings in which such goods are contained, in such
a manner as should ordinarily remain legible until the end of the voyage.
(b)
Either the number of packages or pieces, or the quantity, or weight, as the
case may be, as furnished in writing by the shipper.
(c)
The apparent order and condition of the goods.
Provided
that no carrier, master or agent of the carrier shall be bound to state or show
in the bill of lading any marks, number, quantity, or weight which he has
reasonable ground for suspecting not accurately to represent the goods actually
received, or which he has had no reasonable means of checking.
4.
Such a bill of lading shall be prima facie evidence of the receipt by
the carrier of the goods as therein described in accordance with paragraph
3(a), (b) and (c).
5.
The shipper shall be deemed to have guaranteed to the carrier the accuracy at
the time of shipment of the marks, number, quantity and weight, as furnished by
him, and the shipper shall indemnity the carrier against all loss, damages and
expenses arising or resulting from inaccuracies in such particulars. The right
of the carrier to such indemnity shall in no way limit his responsibility and
liability under the contract of carriage to any person other than the shipper.
6.
Unless notice of loss or damage and the general nature of such loss or damage
be given in writing to the carrier or his agent at the port of discharge before
or at the time of the removal of the goods into the custody of the person
entitled to delivery thereof under the contract of carriage, or, if the loss or
damage be not apparent, within three days, such removal shall be prima facie
evidence of the delivery by the carrier of the goods as described in the bill
of lading.
If
the loss or damage is not apparent, the notice must be given within three days
of the delivery of the goods.
The
notice in writing need not be given if the state of the goods has, at the time
of their receipt, been the subject of joint survey or inspection.
In
any event the carrier and the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought within one year after delivery
of the goods or the date when the goods should have been delivered.
In
the case of any actual or apprehended loss or damage the carrier and the
receiver shall give all reasonable facilities to each other for inspecting and
tallying the goods.
7.
After the goods are loaded the bill of lading to be issued by the carrier,
master, or agent of the carrier, to the shipper shall, if the shipper so
demands, be a "shipped" bill of lading, provided that if the shipper
shall have previously taken up any document of title to such goods, he shall
surrender the same as against the issue of the "shipped" bill of
lading, but at the option of the carrier such document of title may be noted at
the port of shipment by the carrier, master, or agent with the name or names of
the ship or ships upon which the goods have been shipped and the date or dates
of shipment, and when so noted, if it shows the particulars mentioned in
paragraph 3 of Article 3, shall for the purpose of this Article be deemed to
constitute a "shipped" bill of lading.
8.
Any clause, covenant, or agreement in a contract of carriage relieving the
carrier or the ship from liability for loss or damage to, or in connexion with,
goods arising from negligence, fault, or failure in the duties and obligations
provided in this Article or lessening such liability otherwise than as provided
in this Convention, shall be null and void and of no effect. A benefit of
insurance in favour of the carrier or similar clause shall be deemed to be a
clause relieving the carrier from liability.
Article
4
1.
Neither the carrier nor the ship shall be liable for loss or damage arising or
resulting from unseaworthiness unless caused by want of due diligence on the
part of the carrier to make the ship seaworthy and to secure that the ship is
properly manned, equipped and supplied, and to make the holds, refrigerating
and cool chambers and all other parts of the ship in which goods are carried
fit and safe for their reception, carriage and preservation in accordance with
the provisions of paragraph 1 of Article 3. Whenever loss or damage has
resulted from unseaworthiness the burden of proving the exercise of due
diligence shall be on the carrier or other person claiming exemption under this
Article.
2.
Neither the carrier nor the ship shall be responsible for loss or damage
arising or resulting from:
(a)
Act, neglect, or default of the master, mariner, pilot, or the servants of the
carrier in the navigation or in the management of the ship.
(b)
Fire, unless caused by the actual fault or privity of the carrier.
(c)
Perils, dangers and accidents of the sea or other navigable waters.
(d)
Act of God.
(e)
Act of war.
(f)
Act of public enemies.
(g)
Arrest or restraint or princes, rulers or people, or seizure under legal
process.
(h)
Quarantine restrictions.
(i)
Act or omission of the shipper or owner of the goods, his agent or
representative.
(j)
Strikes or lockouts or stoppage or restraint of labour from whatever cause,
whether partial or general.
(k)
Riots and civil commotions.
(l)
Saving or attempting to save life or property at sea.
(m)
Wastage in bulk or weight or any other loss or damage arising from inherent
defect, quality or vice of the goods.
(n)
Insufficiency of packing.
(o)
Insufficiency or inadequacy of marks.
(p)
Latent defects not discoverable by due diligence.
(q)
Any other cause arising without the actual fault or privity of the carrier, or
without the actual fault or neglect of the agents or servants of the carrier,
but the burden of proof shall be on the person claiming the benefit of this
exception to show that neither the actual fault or privity of the carrier nor
the fault or neglect of the agents or servants of the carrier contributed to the
loss or damage.
3.
The shipper shall not be responsible for loss or damage sustained by the
carrier or the ship arising or resulting from any cause without the act, fault
or neglect of the shipper, his agents or his servants.
4.
Any deviation in saving or attempting to save life or property at sea or any
reasonable deviation shall not be deemed to be an infringement or breach of
this Convention or of the contract of carriage, and the carrier shall not be
liable for any loss or damage resulting therefrom.
5.
Neither the carrier nor the ship shall in any event be or become liable for any
loss or damage to or in connexion with goods in an amount exceeding 100 pounds
sterling per package or unit, or the equivalent of that sum in other currency
unless the nature and value of such goods have been declared by the shipper
before shipment and inserted in the bill of lading.
This
declaration if embodied in the bill of lading shall be prima facie
evidence, but shall not be binding or conclusive on the carrier.
By
agreement between the carrier, master or agent of the carrier and the shipper
another maximum amount than that mentioned in this paragraph may be fixed,
provided that such maximum shall not be less than the figure above named.
Neither
the carrier nor the ship shall be responsible in any event for loss or damage
to, or in connexion with, goods if the nature or value thereof has been
knowingly misstated by the shipper in the bill of lading.
6.
Goods of an inflammable, explosive or dangerous nature to the shipment whereof
the carrier, master or agent of the carrier has not consented with knowledge of
their nature and character, may at any time before discharge be landed at any
place, or destroyed or rendered innocuous by the carrier without compensation and
the shipper of such goods shall be liable for all damage and expenses directly
or indirectly arising out of or resulting from such shipment. If any such goods
shipped with such knowledge and consent shall become a danger to the ship or
cargo, they may in like manner be landed at any place, or destroyed or rendered
innocuous by the carrier without liability on the part of the carrier except to
general average, if any.
Article
5
A
carrier shall be at liberty to surrender in whole or in part all or any of his
rights and immunities or to increase any of his responsibilities and
obligations under this Convention, provided such surrender or increase shall be
embodied in the bill of lading issued to the shipper.
The
provisions of this Convention shall not be applicable to charter parties, but
if bills of lading are issued in the case of a ship under a charter party they
shall comply with the terms of this Convention. Nothing in these rules shall be
held to prevent the insertion in a bill of lading of any lawful provision
regarding general average.
Article
6
Notwithstanding
the provisions of the preceding Articles, a carrier, master or agent of the
carrier and a shipper shall in regard to any particular goods be at liberty to
enter into any agreement in any terms as to the responsibility and liability of
the carrier for such goods, and as to the rights and immunities of the carrier
in respect of such goods, or his obligation as to seaworthiness, so far as this
stipulation is not contrary to public policy, or the care or diligence of his
servants or agents in regard to the loading, handling, stowage, carriage,
custody, care and discharge of the goods carried by sea, provided that in this
case no bill of lading has been or shall be issued and that the terms agreed
shall be embodied in a receipt which shall be a non-negotiable document and
shall be marked as such.
Any
agreement so entered into shall have full legal effect.
Provided
that this Article shall not apply to ordinary commercial shipments made in the
ordinary course of trade, but only to other shipments where the character or
condition of the property to be carried or the circumstances, terms and
conditions under which the carriage is to be performed are such as reasonably
to justify a special agreement.
Article
7
Nothing
herein contained shall prevent a carrier or a shipper from entering into any
agreement, stipulation, condition, reservation or exemption as to the
responsibility and liability of the carrier or the ship for the loss or damage
to, or in connexion with, the custody and care and handling of goods prior to
the loading on, and subsequent to, the discharge from the ship on which the
goods are carried by sea.
Article
8
The
provisions of this Convention shall not affect the rights and obligations of
the carrier under any statute for the time being in force relating to the
limitation of the liability of owners of sea-going vessels.
Article
9
The
monetary units mentioned in this Convention are to be taken to be gold value.
Those
contracting States in which the pound sterling is not a monetary unit reserve
to themselves the right of translating the sums indicated in this Convention in
terms of pound sterling into terms of their own monetary system in round
figures.
The
national laws may reserve to the debtor the right of discharging his debt in
national currency according to the rate of exchange prevailing on the day of
the arrival of the ship at the port of discharge of the goods concerned.
Article
10
The
provisions of this Convention shall apply to all bills of lading issued in any
of the contracting States.
Article
11
After
an interval of not more than two years from the day on which the Convention is
signed, the Belgian Government shall place itself in communication with the
Governments of the High Contracting Parties which have declared themselves
prepared to ratify the Convention, with a view to deciding whether it shall be
put into force. The ratifications shall be deposited at Brussels at a date to
be fixed by agreement among the said Governments. The first deposit of
ratifications shall be recorded in a procès-verbal signed by the
representatives of the Powers which take part therein and by the Belgian
Minister of Foreign Affairs.
The
subsequent deposit of ratifications shall be made by means of a written
notification, addressed to the Belgian Government and accompanied by the
instrument of ratification.
A
duly certified copy of the procès-verbal relating to the first deposit
of ratifications, of the notifications referred to in the previous paragraph,
and also of the instruments of ratification accompanying them, shall be
immediately sent by the Belgian Government through the diplomatic channel to
the Powers who have signed this Convention or who have acceded to it. In the
cases contemplated in the preceding paragraph, the said Government shall inform
them at the same time of the date on which it received the notification.
Article
12
Non-signatory
States may accede to the present Convention whether or not they have been
represented at the International Conference at Brussels.
A
State which desires to accede shall notify its intention in writing to the
Belgian Government, forwarding to it the document of accession, which shall be
deposited in the archives of the said Government.
The
Belgian Government shall immediately forward to all the States which have
signed or acceded to the Convention a duly certified copy of the notification
and of the act of accession, mentioning the date on which it received the
notification.
Article
13
The
High Contracting Parties may at the time of signature, ratification or
accession declare that their acceptance of the present Convention does not
include any or all of the self-governing dominions, or of the colonies,
overseas possessions, protectorates or territories under their sovereignty or
authority, and they may subsequently accede separately on behalf of any
self-governing dominion, colony, overseas possession, protectorate or territory
excluded in their declaration. They may also denounce the Convention separately
in accordance with its provisions in respect of any self-governing dominion, or
any colony, overseas possession, protectorate or territory under their
sovereignty or authority.
Article
14
The
present Convention shall take effect, in the case of the States which have
taken part in the first deposit of ratifications, one year after the date of
the protocol recording such deposit.
As
respects the States which ratify subsequently or which accede, and also in
cases in which the Convention is subsequently put into effect in accordance
with Article 13, it shall take effect six months after the notifications
specified in paragraph 2 of Article 11 and paragraph 2 of Article 12 have been
received by the Belgian Government.
Article
15
In
the event of one of the contracting States wishing to denounce the present
Convention, the denunciation shall be notified in writing to the Belgian
Government, which shall immediately communicate a duly certified copy of the
notification to all the other States, informing them of the date on which it
was received.
The
denunciation shall only operate in respect of the State which made the
notification, and on the expiry of one year after the notification has reached
the Belgian Government.
Article
16
Any
one of the contracting States shall have the right to call for a fresh
conference with a view to considering possible amendments.
A
State which would exercise this right should notify its intention to the other
States through the Belgian Government, which would make arrangements for
convening the Conference.
A BILL OF LADING
A bill of lading (sometimes referred to
as a BOL,or B/L) is a document issued by a carrier to a
shipper, acknowledging that specified goods have
been received on board as cargo for conveyance to a
named place for delivery to the consignee who
is usually identified. A thorough bill of lading involves the use of at
least two different modes of transport from road, rail, air, and sea. The term
derives from the verb "to lade" which means to load a cargo onto a
ship or other form of transportation.
A
bill of lading can be used as a traded object. The standard short form bill of
lading is evidence of the contract of
carriage of goods and it serves a number of purposes:
·
It is evidence that a valid contract of carriage, or a chartering contract,
exists, and it may incorporate the full terms of the contract between the
consignor and the carrier by reference (i.e. the short form simply refers to
the main contract as an existing document, whereas the long form of a bill of
lading (connaissement intégral) issued by the carrier sets out all the
terms of the contract of carriage);
·
It is a receipt signed by the carrier confirming whether goods matching the
contract description have been received in good condition (a bill will be
described as clean if the goods have been received on board in apparent
good condition and stowed ready for transport); and
·
It is also a document of transfer, being freely transferable but not a negotiable instrument in the legal sense, i.e. it
governs all the legal aspects of physical carriage, and, like a cheque or other negotiable instrument, it may be endorsed affecting ownership of
the goods actually being carried. This matches everyday experience in that the
contract a person might make with a commercial carrier like FedEx for mostly
airway parcels, is separate from any contract for the sale of the goods to be
carried, however it binds the carrier to its terms, irrespectively of who the
actual holder of the B/L, and owner of the goods, may be at a specific moment.
·
Main types of bill
Straight bill of lading
This
bill states that the goods are consigned to a specified person and it is not
negotiable free from existing equities, i.e. any endorsee acquires no better
rights than those held by the endorser. So, for example, if the carrier or
another holds a lien over
the goods as security for unpaid debts, the endorsee is bound by the lien.
Although, if the endorser wrongfully failed to disclose the charge, the
endorsee will have a right to claim damages for
failing to transfer an unencumbered title.
Also
known as a non-negotiable bill of lading; and from the banker's point of view
this type of bill of lading is not safe.
Order bill of lading
This
bill uses express words to make the
bill negotiable, e.g. it states that delivery is to be made to the further
order of the consignee using words such as "delivery to A Ltd. or to order
or assigns". Consequently, it can be endorsed by A Ltd. or the right to
take delivery can be transferred by physical delivery of the bill accompanied
by adequate evidence of A Ltd.'s intention to transfer.
Bearer bill of lading
This
bill states that delivery shall be made to whosoever holds the bill. Such bill
may be created explicitly or it is an order bill that fails to nominate the
consignee whether in its original form or through an endorsement in blank. A
bearer bill can be negotiated by physical delivery.
Surrender bill of lading
Under
a term import documentary credit the bank releases the documents on
receipt from the negotiating bank but the importer does not pay the bank until
the maturity of the draft under the relative credit. This direct liability is
called Surrender Bill of Lading (SBL), i.e. when we hand over the bill of lading
we surrender title to the goods and our power of sale over the goods.
Other terminology
A sea
or air waybill is a
non-negotiable receipt issued by the carrier. It is most common in the
container trade either where the cargo is
likely to arrive before the formal documents or where the shipper does not
insist on separate bills for every item of cargo carried (e.g. because this is
one of a series of loads being delivered to the same consignee). Delivery is
made to the consignee who identifies himself. It is customary in transactions
where the shipper and consignee are the same person in law making the rigid
production of documents unnecessary.
The
UK's Carriage of Goods by Sea Act 1992 creates a further class of document
known as a ship's delivery order which contains an undertaking to carry
goods by sea but is neither a bill nor a waybill.
A
straight bill of lading by land or sea, or sea/air waybill is not documents
that can convey title to the goods they represent. They do no more than require
delivery of the goods to the named consignee and (subject to the shipper's
ability to redirect the goods) to no other. This differs from “order” or
“bearer” bills of lading which are possessory title documents and negotiable,
i.e. they can be endorsed and so transfer the right to take delivery to the
last endorsee. Nevertheless, bills of lading are "documents of
title", whether negotiable or not, under the terms of the Uniform
Commercial Code. Definitions of "Document of
Title" and "Bill of Lading"
A sample of the issues
In
most national and international systems, a bill of lading is not a document of
title, and does no more than identify that a particular individual has a right
to possession at the time when delivery is to be made. Problems arise when
goods are found to have been lost or damaged in transit, or delivery is delayed
or refused. Because the consignee is not a party to the contract of carriage,
the doctrine of privity of
contract states that a third party has no right to enforce the agreement.
However, whether this is a problem to the consignee depends on who owns the
goods and who holds the risks associated with the carriage. This will be
answered by examining the terms of all the relevant contracts. If the consignor
has reserved title until payment is made, the consignor can sue to recover his
or her loss. But if ownership and/or the risk of loss has transferred to the
consignee, the right to sue may not be clear in contract, although there could
be remedies in tort/delict (the
issue of risk will have been most carefully considered to decide who should
insure the goods during transit). Hence, a number of international Conventions
and domestic laws specifically address when a consignee has the right to sue.
The legal solution most often adopted is to apply the principle of subrogation,
i.e. to give the consignee the same rights of action held by the consignor.
This enables most of the more obvious cases of injustice to be avoided.
In
the municipal law of the U.S., the issue and enforcement of bills which may be
documents of title, is governed by Article 7 of the Uniform Commercial Code. However, since bills of lading are most
frequently used in transborder, overseas or airborne shipping, the laws of
whatever other countries are involved in the transaction covered by a
particular bill may also be applicable including the Hague Rules, the Hague-Visby Rules and the Hamburg Rules at
international level for shipping, The Warsaw Convention for the Unification of
Certain Rules for International Carriage by Air 1929 and The Montreal
Convention for the Unification of Certain Rules for International Carriage by
Air 1999 for air waybills, etc. It is customary for parties to the bill to
agree both which country's courts shall have the jurisdiction to hear any case
in a forum selection clause, and the municipal system of law to be
applied in that case choice of law clause. The law selected is termed the proper law in private international law and it gives a form of extraterritorial
effect to an otherwise sovereign law,
e.g. a Chinese consignor contracts with a Greek carrier for delivery to a
consignee based in New York: they agree that any dispute will be referred to
the courts in New York (since that is the most convenient place — the forum conveniens) but that the New York courts will apply
Greek law as the lex causae to
determine the extent of the carrier's liability.
INCOTERMS
Incoterms rules explain standard terms that are
used in contracts for the sale of goods.
They are essential ICC tools that help traders avoid
misunderstandings by clarifying the costs, risks, and responsibilities of both
buyers and sellers.
Because the rules are developed by experts and
practitioners brought together by ICC, and involve a long consultative process,
they are globally accepted and have become the standard in international
business rules setting.
The Incoterms standard clauses are one example
of the ICC rules governing international business activities, with rules
setting making up one of the three pillars of ICC's activities along with
policy advocacy and dispute resolution through arbitration.
Incoterms 2010, will be launched in September
and come into effect on 1 January 2011.
Incoterms or international
commercial terms are a series of international sales terms, published by
International Chamber of Commerce (ICC) and widely used in international
commercial transactions. They are used to divide transaction costs and
responsibilities between buyer and seller and reflect state-of-the-art
transportation practices. They closely correspond to the U.N. Convention on
Contracts for the International Sale of Goods. The first version was introduced
in 1936 and the present dates from 2000.
Group F – Main carriage unpaid
FCA – Free Carrier (named
place)
The seller hands over the goods, cleared for export, into the custody of
the first carrier (named by the buyer) at the named place. This term is
suitable for all modes of transport, including carriage by air, rail, road, and
containerised / multi-modal transport.
FAS – Free Alongside Ship
(named loading port)
The seller must place the goods alongside the ship at the named port. The
seller must clear the goods for export; this changed in the 2000 version of the
Incoterms. Suitable for maritime transport only.
FOB – Free on board (named
loading port)
The seller must load the goods on board the ship nominated by the buyer,
cost and risk being divided at ship's rail. The seller must clear the goods for
export. Maritime transport only. It also includes Air transport when the seller
is not able to export the goods on the schedule time mentioned in the letter of
credit. In this case the seller allows a deduction of sum equivalent to the
carriage by ship from the air carriage.
Group C – Main carriage paid
CFR or CNF – Cost and
Freight (named destination port)
Seller must pay the costs and freight to bring the goods to the port of
destination. However, risk is transferred to the buyer once the goods have
crossed the ship's rail. Maritime transport only.
CIF – Cost, Insurance and
Freight (named destination port)
Exactly the same as CFR except that the seller must in addition procure and
pay for insurance for the buyer. Maritime transport only.
CPT – Carriage Paid To
(named place of destination)
The general/containerised/multimodal equivalent of CFR. The seller pays for
carriage to the named point of destination, but risk passes when the goods are
handed over to the first carrier.
CIP – Carriage and Insurance
Paid (To) (named place of destination)
The containerised transport/multimodal equivalent of CIF. Seller pays for
carriage and insurance to the named destination point, but risk passes when the
goods are handed over to the first carrier.
Group D – Arrival
DAF – Delivered At Frontier
(named place)
This term can be used when the goods are transported by rail and road. The
seller pays for transportation to the named place of delivery at the frontier.
The buyer arranges for customs clearance and pays for transportation from the
frontier to his factory. The passing of risk occurs at the frontier.
DES – Delivered Ex Ship
(named port)
Where goods are delivered ex ship, the passing of risk does not occur until
the ship has arrived at the named port of destination and the goods made
available for unloading to the buyer. The seller pays the same freight and
insurance costs as he would under a CIF arrangement. Unlike CFR and CIF terms,
the seller has agreed to bear not just cost, but also Risk and Title up to the
arrival of the vessel at the named port. Costs for unloading the goods and any
duties, taxes, etc… are for the Buyer. A commonly used term in shipping bulk
commodities, such as coal, grain, dry chemicals - - - and where the seller
either owns or has chartered, their own vessel.
DEQ – Delivered Ex Quay
(named port)
This is similar to DES, but the passing of risk does not occur until the
goods have been unloaded at the port of destination.
DDU – Delivered Duty Unpaid
(named destination place)
This term means that the seller delivers the goods to the buyer to the
named place of destination in the contract of sale. The goods are not cleared
for import or unloaded from any form of transport at the place of destination. The
buyer is responsible for the costs and risks for the unloading, duty and any
subsequent delivery beyond the place of destination. However, if the buyer
wishes the seller to bear cost and risks associated with the import clearance,
duty, unloading and subsequent delivery beyond the place of destination, then
this all needs to be explicitly agreed upon in the contract of sale.
DDP – Delivered Duty Paid
(named destination place)
This term means that the seller pays for all transportation costs and bears
all risk until the goods have been delivered and pays the duty. Also used
interchangeably with the term "Free Domicile". The most comprehensive
term for the buyer. In most of the importing countries, taxes such as (but not
limited to) VAT and excises should not be considered prepaid being handled as a
"refundable" tax. Therefore VAT and excises usually are not
representing a direct cost for the importer since they will be recovered
against the sales on the local (domestic) market.
Summary of terms
For a
given term, "Yes" indicates that the seller has the
responsibility to provide the service included in the price. "No"
indicates it is the buyer's responsibility. If insurance is not included
in the term (for example, CFR) then insurance for transport is the responsibility
of the buyer or the seller depending on who owns the cargo at time of
transport. In the case of CFR terms, it would be the buyer while in the case of
DDU or DDP terms, it would be the seller.
No comments:
Post a Comment