What is a Bill of Lading? - An Introduction

May 14, 2010- A bill of lading- often called BOL, or B/L- is a receipt that is given by the carrier to the shipper acknowledging receipt of the goods being shipped and specifying the terms of delivery. The term lading originates from activity "to lade" meaning “to load a cargo onto a ship or other form of transportation.” To get and understand the Bill of Lading is one of the legal rights and responsibilities of the relocating person during the moving process. This document is the final contract with the moving company having terms and conditions of the moving contract. A bill is described as clean if the goods are received in good condition and arrive in the same condition as they were shipped in.

Types of Bill of lading

The bill of lading document acts as an evidence of a valid contract of carriage between the consignor and the carrier. It sets all the terms of the contract of carriage. There are four major types of bills of lading.

Straight bill of lading- It is also referred to as a non-negotiable bill of lading. A straight bill of lading states that the goods transported are consigned to a specified person and it is not negotiable free from existing equities. For example, if the carrier (transportation company) holds a lien over the goods as security for unpaid debts, the endorsee is bound by the lien. However, if the endorser wrongfully fails to disclose the charge, the endorsee has a right to claim damages for failing to transfer an unencumbered title. This type of lading bill is not considered safe from the banker's point of view.

Order bill of lading- This type of lading bill uses terms to make the bill negotiable. For example, it states that delivery is to be made to the further order of the consignee. The consignee has the right to take delivery or to transfer the physical delivery of the bill accompanied by adequate evidence about intention to transfer it.

Bearer bill of lading- This type of lading bill states that delivery of goods shall be made to whosoever holds the bill. It can be called an order bill of lading that doesn't nominate the consignee. A bearer bill of lading 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 known as Surrender Bill of Lading (SBL), i.e. when the bill of lading is handed over, the title to the goods and power of sale over the goods is surrendered.

What Should a Bill Of Lading Contain?

The Bill of lading must contain

• Date of bill issue
• Name of the person from whom the goods have been received
• Place where the goods have been received
• Place where the goods have to be transported
• Instructions regarding whether the goods received will be delivered to a specified person, or to the order of a specified person
• A description of the goods or of the packages containing goods
• Signature of the carrier.
• Any other terms and conditions that are not contrary to law or public policy and about the carrier's obligation to exercise at least that degree of care in the transportation of goods and safe-keeping of them which a reasonably careful man would exercise in regard to similar goods of his own.

An endorsed order bill of lading is an excellent collateral document provided the merchandise covered by it is of a suitable character. The straight bill of lading, on the other hand, merely provides evidence that certain goods were shipped.

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