Ala-Too International University

Carriage of Goods
Presentation by
Darikha Muratalieva
Ilgiz Toichiev
Definition of Contract of Carriage
 A contract of carriage is a contract between a carrier of goods or
passengers and the consignee or passenger. Contracts of carriage
typically define the rights, duties and liabilities of parties to the
contract, addressing topics such as acts of God and including clauses
such as force majeure. Among common carriers, they are usually
evidenced by standard terms and conditions printed on the reverse of
a ticket or carriage document.
Carriage of goods
 Carriage of goods in law means the transferring of goods by land,
sea or air. The relevant law governs the right, responsibility,
liabilities, and immunities of carrier.
 Carriage of goods means the transferring of goods through land
(including inland navigation), air or sea by relevant parties. The
laws related to carriage in Bangladesh are mainly the Carriers Act
'1865.

Carrier:
Any person or an organization, by an express or implied contract,
with or without rumination, carries goods and/or passengers is
called carrier.
Common carrier or Public carrier
• A common carrier is one whose business is carriage of goods for
hire. A common carrier is defined as one who undertakes to carry
for heir, from place to place the goods of anyone without
discrimination.

• According to the common carrier act 1865- A common

carrier as an individual, firm, or company (other than the
government) who transport goods as a business, for money, over
land or inland waterways, without discrimination between
different consignors.
Important Features
• Only carriers of goods come within the definition
• A carrier of passengers is not a common carrier
• Who carries goods occasionally is not a common carrier.
• To carry the goods of anyone without discrimination and bound to
carry the goods of any person who is ready to pay the useful freight,
provided certain condition (relating to space, type of goods, etc) are
fulfilled .
• The liabilities of carrier are determined by the common carrier act,
1865.
Private Carrier
• A private carrier is one who does not do regular business as a carrier but
occasionally carries goods for money.

Common Features
• A private carrier can determinate between different hirers.
• He is not bound to carry the goods of any and everybody.
• A private carrier is not governed by the common carriers act, 1865.
• He‘s position is as a bailee.
• A private carrier has the same right, duties and liabilities as a bailee under the
contract act.
• He is bound to take as much care of the goods entrusted to him as a man of
ordinary prudence would take under similar circumstances of his own goods of
the same quality, bulk and size.(section 151,152,and 161, contract act)
Gratuitous Carrier
• A gratuitous carrier is one who carries goods (or passenger)
without any charge. Gratuitous carrier is in a position of a
bailee. But if such a carrier agrees to carry the goods, he must
also do the duties of the carrier. If a person undertake to
perform a voluntary act, he is liable if he performs it
improperly. Negligence by the carrier is actionable.
It is to be noted that an agreement of carriage with a gratuitous
carrier is void because of want of consideration. Therefore no
action can be taken against him for refusing to carry the goods
even though he has undertaken.

For example
• The owner of a motor car who gives a lift to a friend without
charge is a gratuitous carrier.
1) Right to get remuneration:
A common carrier is entitled to the agreed charges for His work .If charges have
not been agreed, common carrier is entitled to the agreed charges he is entitled to
reasonable charges for his services .He can demand payment of hire in advance
and if he is Not paid
he may Refuse to carry.

2) Right to Retain:
He has a right to retain the goods and refuse delivery thereof until his charges of
hire are paid If no charges are paid he can exercise particular lien over the goods .
The lien cannot be enforced If the carrier has agreed to give credit.

3) Right to Recover Expenses:

If some Expenses are incurred due to the safe carriage of goods due to disasters
such as flood Then the carrier can recover the expenses from the owner.
4) Right to Recover Damages:
Carrier can recover damages from the consignor if the goods of dangerous
natures are not packed properly due to which some accident happens so the
owner is liable to pay all the damages to the carrier or the vehicle.

5) Right to refuse to carry Goods:

He has a right to refuse to carry the dangerous nature goods. He can also refuse
to carry goods which he does not normally carry.

6) Right to Limit his liability:

A common carrier has a right to limit his liability by Entering into a special
contract Under Certain circumstances.
 Liabilities of a Common Carrier

The liability of a common carrier of goods is laid down in the

Carriers Act, 1865. For this purpose, the Act has classified the goods
into two categories:

The scheduled goods are those which are enumerated in a

Schedule to the Act. They are valuable articles like gold, silver,
precious stones and pearls, bills and hundis, currency and bank notes,
glass, china silk, articles of ivory, time pieces, musical and scientific
instruments, etc. All other goods are non-scheduled.
Liabilities of a carrier by sea
• A carrier of goods by sea i.e. A shipper is liable only for loss or damage
arising or damaging from his negligence or fault. He is not liable even for
the loss caused by the neglect of the master or the mariner or the crew in
the navigation of the ship.

• A ship owner cannot limit or lessen his liabilities arising from his
negligence.

• The carrier shall not be liable in any event for any loss or damage to the
goods in an amount exceeding Euro 100 per package or unit unless, the
nature or the value of such goods have been declared by the shipper before
shipment.

• Goods often of dangerous nature to the shipment where of the carrier,

master has not consented.
Bill of Lading
 A bill of lading (BL - sometimes referred to as 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 through
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.
 Bill of Lading
• 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 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.
Bill of Lading

• The BL must contain the following information:

• Name of the shipping company;
• Flag of nationality;
• Shipper's name;
• Order and notify party;
• Description of goods;
• Gross/net/tare weight; and
• Freight rate/measurements and weighment of goods/total freight
 Different types of bill of ladings
• There are different criteria on which bill of ladings can be defined and
differentiated. Few of these criteria being the “place from where carriers
takes the responsibility of the cargo” (Port to port, Multimodal and
through bill of ladings) or if the owner of the cargo can sell the cargo
before it reaches by transferring the title of the bill of lading (Negotiable
and non-negotiable bill of lading)

• Different types of bill of ladings based upon Negotiable and non-

Negotiable documents.

• The main difference between the two types is title (ownership) of the one
can be transferred to another party while the other is consigned to a
named party and hence he/she has to be the final recipient of the cargo
as the title of this type of bill of ladings cannot be transferred.
 Letters of Credit
• A letter of credit is a document issued by a third party that guarantees payment
for goods or services when the seller provides acceptable documentation.
Letters of credit are usually issued by banks or other financial institutions, but
some creditworthy financial services companies, like insurance companies or
mutual funds, might issue letters of credit under certain circumstances.

• A letter of credit generally has three participants. First, there is

the beneficiary, the person or company who will be paid. Next, there is
the buyer or applicant of the goods or services. This is the one who needs the
letter of credit. Finally, there is the issuing bank, the institution issuing the
letter of credit. In addition, the beneficiary may request payment to an advising
bank, which is a bank where the beneficiary is a client, rather than directly to
the beneficiary. This might be done, for example, if the advising bank financed
the transaction for the beneficiary until payment was received.
Types of Letters of Credit
• Most letters of credit are import/export letters of credit, which, as the
name implies, are letters of credit that are used in international trade. The
same letter of credit would be termed an import letter of credit by the
importer and an export letter of credit by the exporter. In most cases, the
importer is the buyer and the exporter is the beneficiary.

• There are also other types of letters of credit. The revocable letter of

credit can be changed at any time by either the buyer or the issuing bank
with no notification to the beneficiary. The most recent version of the UCP,
UCP 600, did away with this form of letter of credit for any transaction
under their jurisdiction. Conversely, the irrevocable letter of credit only
allows change or cancellation of the letter of credit by the issuing bank after
application by the buyer and approval by the beneficiary. All letters of
credit governed by the current UCP are irrevocable letters of credit.
Risks in Letter of Credit Transactions
• Letter of credit transactions are not without risks. The risks inherent
in these types of transactions include:
• Fraud risk, in which the payment is obtained through the use of
falsified or forged documents for worthless or nonexistent
merchandise
• Regulatory risk, in which government action may prevent
completion of the transaction
• Legal risk, in which legal action prevents completion of the
transaction
• Force majeure risk, in which completion of the transaction is
prevented by an external force, such as war or natural disaster
• Failure of the issuing or collecting bank
• Or insolvency of buyer or beneficiary.
The carriage of goods in Kyrgyzstan