Most bills of lading are printed on both sides. On the face (front) are boxes
or spaces into which are entered all the information necessary to identify the
particular cargo, the journey, the names and addresses of cargo interests and,
possibly, other details, such as freight.
Two clauses are often printed on the face of the bill: a clause with very
much a standard wording to say that the goods have been shipped on board in
apparent good order and condition. Such wording makes the bill a shipped
bill of lading. This type of bill is often a requirement of banks who advance
money using the bill of lading as collateral security and who wish to be satisfied
that the goods are on board the ship.
Sometimes the shipper requires a bill of lading before the goods have been
loaded on board. In such a case, the shipping line may issue a so- called
received for shipment bill of lading indicating that the goods have been
received into its care but not yet loaded on board. Such a bill is not usually
acceptable to the banks.
The other clause to be found regularly on the face is one which states that
only one original bill need be surrendered, or accomplished, in exchange for
the goods at destination, the others then being null and void.
The back of charter- party bills of lading usually contains a reference to the
charter- party together with a small number of the more important clauses
such as the clause paramount and the general average clause (for both of which,
see below).
On the back of the liner bill of lading are to be found the liner company’s
standard terms and conditions. These are set out in clauses, normally numbered
one and up, often also broken down into sections. Types of clause
which are to be found in most bills of lading are shown below. The wording
differs according to the particular company although there are standard forms,
notably issued by BIMCO.
Clause paramount: Clause which stipulates that the contract of carriage is
governed by the Hague Rules or Hague- Visby Rules or the enactment of these
rules in the country having jurisdiction over the contract. Also referred to as
the paramount clause.
Deck cargo clause: Clause which exempts the ship from liability for loss
or damage to cargo carried on deck.
Demise clause: Clause stipulating that the contract of carriage is between
the shipper or bill of lading holder and the shipowner, who is deemed to be
the carrier. Bills of lading issued by charterers of a ship on behalf of the owner
and master often contain this clause. The carrier is the party responsible for
the care of the cargo under the contract of carriage and the performance of
that contract. The inclusion of this clause is normally intended to identify the
carrier as the shipowner, thus distinguishing him from the liner company who
may have chartered the ship and may therefore not be legally responsible for
the navigation of the ship and the care of the cargo. Also called the identity
of carrier clause. There are some countries where such a clause may not be
upheld.
Demurrage clause: Demurrage is associated more with charter- parties
than with liner bills of lading but, in some liner trades, there is a provision
for demurrage in the event that the ship is delayed in loading or discharging.
Such delays can occur when cargo is slow in arriving at the load port or when
receivers cannot clear the quay quickly enough at the discharge port to free up
space for the ship to continue discharging. In such cases, all the cargo interests
may be liable for a share of the specified demurrage.
Deviation clause: Clause allowing the shipping line or shipowner to
deviate from the agreed route or normal trade route. This clause varies from
contract to contract and may permit the ship to call at unscheduled ports
for whatever reason, or simply to deviate to save life or property. In a time
charter- party, this clause is also known as a putting back clause.
Exceptions clause: Clause which exonerates the carrying ship from
responsibility for damage to cargo from certain named causes such as an Act
of God or negligence of the master.
Freight clause: Clause which sets out the time when freight is due, normally
prepaid, and may provide for cargo interests to pay for any unspecified
charges, such as duties and taxes, which may arise.
General average clause: Clause in a bill of lading or charter- party which
stipulates in what country or place and by what rules, often the York- Antwerp
Rules, general average is to be adjusted.
Lien clause: Clause in a voyage charter- party which entitles the shipowner
to exercise a lien on the cargo, that is, to retain control of the cargo until any
freight, dead freight or demurrage which is owing is paid. This provision is
often incorporated into the cesser clause which seeks to relieve the charterer
of all responsibility under the charter- party once the cargo has been shipped.
Litigation clause: Clause in a bill of lading or charter- party which stipulates
that any dispute between the parties arising from the contract be resolved
in a court of law, as opposed to arbitration. It also specifies which country
has jurisdiction, that is, the authority to administer justice. Also known as
the jurisdiction clause, although jurisdiction is also used to describe the
prevailing law.
New Jason clause: Protective clause which provides that the shipowner
is entitled to recover in general average even when the loss is caused by negligent
navigation. The need for such a clause arises from the decision of an
American court that, while American law exempted a shipowner from liability
for loss or damage to cargo resulting from negligent navigation, this did not
entitle the shipowner to recover in general average for such a loss.
Optional cargo clause: Optional cargo is cargo which is destined for
one of the ship’s discharge ports, the exact one not being known when the
goods are loaded. It must, therefore, be stowed in such a position that it can
be removed at any of the selected ports which are known as optional ports,
without disturbing other cargo. The clause stipulates the amount of notice
prior to arrival at one of the optional ports which the shipping line requires to
discharge the cargo at that port. It specifies the options open to the ship when
such notice is not given, or not given in time. In the case of a liner shipment,
there may be an extra charge to the shipper for retaining an option, and an
extra charge for an optional bill of lading being issued.
Scope of the voyage: Depending on the individual clause, this may give
the ship certain freedoms, such as allowing her to call at any port on or off the
route for specific reasons, for example, taking on bunkers, or to call at ports in
or out of geographical rotation.
War, strikes, ice clause: This clause sets out the course of action open to
the master of the ship in the event that the ship or her crew would be put at
risk of harm or delay should one of these situations arise during the voyage.
Possible actions, depending on the particular clause, include sailing before
completing cargo operations, or proceeding to a different port to the one
named in the contract.