Tue, Oct

Functions of a bill of lading


Functions of a bill of lading. When asked to define a bill of lading, people may state that it “... has the following functions: it is a receipt for cargo, a document of title to the goods described and evidence of the contract of carriage”.

The word “function” reflects the purpose or duty of the document rather than its nature or characteristics or status. Therefore, when describing a bill of lading perhaps the words of one eminent judge in the English Court of Appeal in The Delfini, 1990 are most apt. He said:

“First as to the status of the bill of lading as a ‘document of title’. I put this expression in quotation marks, because it is often used in relation to a bill of lading, it does not in this context bear its ordinary meaning. It signifies that in addition to its other characteristics as a receipt for the goods and as evidence of the contract of carriage between shipper and shipowner, the bill of lading fulfils two distinct functions. 1. It is a symbol of constructive possession of the goods which (unlike many other symbols) can transfer constructive possession by endorsement and transfer: it is a transferable ‘key to the warehouse’. 2. It is a document which, although not itself capable of directly transferring the property in the goods which it represents, merely by endorsement and delivery, nevertheless is capable of being part of the mechanism by which property is passed.”

It would appear, therefore, that instead of using the phrase “Functions of the bill of lading” to signify what the bill of lading is, the phrase should be “characteristics of a bill of lading”. The three characteristics are:

(1)It is a receipt for goods, signed by the master or other duly authorized person on behalf of the carriers;

(2)It is documentary evidence of the contract of carriage between the shipper and the carrier; and,

(3)It is a document of title to the goods described therein.