Business Law & Taxation

Law of
Carriage of Goods

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Law of Carriage of Goods

Carriage Act 1865

An Act relating to the rights and liabilities of Common Carriers Preamble. 

Whereas it is expedient not only to enable common carriers to their liability for
loss of the damage to property delivered to them to be carried but also to declare
their liability for loss of or damage to such property occasioned by the negligence
or criminal acts of themselves, their servants or agents ; it is enacted as follows

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Law of Carriage of Goods

1. Carriage of Goods by Land

2. Carriage of Goods by Sea

3. Carriage of Goods by Air

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Law of Carriage of Goods

Contract of Carriage
A contract where a company or person agrees to carry goods or people from one
place to another in return of payment whether by land, air or sea is called the carrier.

Carrier
The party or person who carries goods or passenger for payment weather by land,
sea or air.

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Law of Carriage of Goods

KINDS OF CARRIER ((Carriage Act 1865)

1. Common carrier (one who transport goods for others for money)
2. Private Carrier (one who carries his own goods)

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Law of Carriage of Goods

1. Common Carrier
Any Individual, firm or company engaged in the business of transporting for hire,
goods from place to place, by land or inland navigation, for all persons discriminately.

2. Private Carrier
A private carrier is one who does not make general offer but carries goods occasion-
ally. He carries goods for a particular person on some terms mutually agreed upon.
He is not bound to carry for all indiscriminately. He can accept or reject the offer for
carriage of goods. His position of a bailee, he is therefore governed by contract act
1872.

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Law of Carriage of Goods

Features of Common Carrier

1. Common Carrier
A common carrier may be an individual, firm or company excluding Government.
Then Railway as Govern by government cannot called a common carrier. Although
Railway is engaged in transporting goods. Similarly post office is not a common
carrier, it is not the agent of sender.
It has its own separate act .

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Features of Common Carrier

2. For Hire
A common carrier is one who engaged in business of transporting goods for hire. It
means that anyone who carries goods occasionally or free of charge is not a common
carrier. Similarly, a carrier who carry passenger is not a common carrier.

3. Regular Business
A common carrier is a regular business to earn a money. If a carrier carries goods
occasionally, it is not a common carrier.

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Features of Common Carrier
4. Inland Navigation
The carriage must be made by land or inland navigation (Water ways). The term
inland navigation mean the carriage of goods by boats, steams that sail in canals and
rivers.
5. All Persons Indiscriminately
A common carrier is bound to carry the goods, of any person who offer his goods for
carriage and pay for the service, without any discrimination. If a carrier reserve the
right to reject an offer even if there is accommodation in the carriage and the offeror
is ready to pay the freight, he is not a common carrier.

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Rights of Common carrier
Rights of Common carrier
Right to get remuneration
Right of Lien
Right to recover damages
Sue Others
Sell goods

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Rights of Common carrier

1. Remuneration
A common carrier is entitled to the agreed charges for his work. If charges have not
been agreed, he is entitled to reasonable charges for his service. He can demand
payment of hire in advance and if he is not paid, he may refuse to carry.

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

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Rights of Common carrier

3. Sue Others
The carrier has a special right regarding the goods delivered to him for carriage. He
can sue file against any person who wrongly deprive him of goods or injures him.
4. Recover Expense
If it is necessary to incur some expense for the safety of goods from extra ordinary
danger such as flood, the carrier ought to incur it. He can recover such expense from
owner.

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Rights of Common carrier

5. Recover Damages
He can recover damages from the consignor if the goods are of dangerous nature or
not properly packed and the carrier suffer injury there from. He can recover damages
if such damages cause any damage to vehicle .

6. Sell Goods
On refusal of acceptance of goods from consignee, the carrier would be entitled to
take such steps as may be deemed reasonable in the circumstances of the case. He
can even sell the goods if the same are on perishable nature.

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Rights of Common carrier

7. Give Concession
He has a right to give some concession to any person.

8. Refuse to Carry goods

He has the right to refuse to carry the goods under some special circumstances. He
can refuse to carry the dangerous nature of goods.

9. Limit his liability

A common carrier has right to limit his liability to entering in a special contract
under different circumstances.

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Duties of Common Carrier

1. Receive Goods
A common carrier is bound to receive for carriage all the goods offered, provided he
has convenience to carry them, and the goods are of proper kind and the employer
is ready to pay reasonable price.

2. Carry Goods
A common carrier is bound to carry goods for all persons who employee him for the
carriage of goods. He can refuse to carry the goods under special circumstances.

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Duties of Common Carrier
3. Follow Route
A common carrier is bound to carry goods deliver to him for carriage by his usual
route. Which may or may not be shortest route, he however deviate from his usual
route for the safe carriage of goods.

4. Deliver Goods
The carrier must deliver goods at the agreed time, where no time is fixed within a
reasonable time. He is not liable for causes of delay beyond his control.

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Duties of Common Carrier
5. Carry Goods Safely
He must carry the goods with a reasonable care. It is the duty of common carrier to
ensure their safety during the carriage and until delivery. He is responsible to the
owner for safe and sound delivery.

6. Provide suitable carrier

It is also his duty to load the goods properly in the vehicle so that the goods may be
carried destination safely.

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Duties of Common Carrier

7. Deliver at proper place

He must deliver the goods to consignee at the decided place. He is not bound to
deliver the goods at any other place.
8. Right person
It is duty to a common carrier to deliver the goods to right person in accordance
with the usual course of business.
9. Obey Instructions
When the goods are in transit, the carrier is bound to obey the instructions of the
consignor as to alteration of delivery.

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Railway as Carrier

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Railway as carrier

Railway as carrier
Railway is owned and govern by the government, so it is not a common carrier. The
carriage of goods by railway is governed by railways Act, 1890.
According to section 3 of Railway Act 1890 the word “ Railway” means a railway or
any portion of railway for public carriage of passengers, animals or goods. Railway
may transport goods in freight trains or in passenger trains.
Forwarding Note
Every consignor of goods or animal, has to prepare a note called forwarding note or
consignment note. It contains the description of goods, number of packages, weight,
name and addresses of the consignor and the consignee, must pay the freight.

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Railway as carrier

Railway Receipt (RR)

On submission of forwarding note to the railway “Parcel office” the consignor is
given a receipt. Acknowledging the goods with an undertaking to carry in accordance
with the terms and conditions given on the back of the forwarding note. It is a
document of title to the goods. The consignor is required to send the RR to con-
signee, so that he can take the delivery of the goods.

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Railway as carrier

Duties of Railway administration

• Provide Facilities
It is duty of railway administration to provide all reasonable facilities for the receiv-
ing, forwarding and delivering of traffic without unreasonable delay.

• Treat Equally
It is duty of railway administration not to give any undue or unreasonable preference
or advantage to or in favor of, any person or any particular description of traffic, any
respect whatsoever.

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Railway as carrier

Duties of Railway administration

• Follow Directions
It is duty of Railway to follow the direction of Federal Government for transport of
goods in the public interest. The Railway is bound to carry goods for every person
who pays freight and follow the regulations.

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Railway as carrier
Liabilities of Railway Administration

Responsible for loss, destruction, damage in transit or non delivery except following
• Act of God
• Act of war
• Act of public enemies
• Arrest or seizure under legal process
• Act of negligence on the part to service taker
• Fire Explosion

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Carriage of Goods
by Sea

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Carriage of Goods by Sea

Contract of Affreightment

The contract to carry goods by sea is called a contract of affreightment.

It is a contract between a ship owner and consignor, where the ship owner agrees
to carry cargo within specified time in return of specified freight.

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Carriage of Goods by Sea

Types of contract of Affreightment

1. Charter Party
• Voyage charter
• Time Charter
• Charter by Demise
2. Bill of Lading

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Carriage of Goods by Sea
1. Charter Party
A Charter party is an agreement for the purpose of hiring the whole ship or some
part for the purpose of carriage of the goods. The person who hire the ship is called
charter
a) Voyage Charter Party
When the ship is charted for a special voyage (specific place) is called voyage charter
party. e.g. from China to Pakistan
b) Time Charter
When the ship is charter for a specific period irrespective of the number of voyage.
c) Charter by Demise
In such case the charter become the time being owner of the ship for specific time.
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Carriage of Goods by Sea
2. Bill of Lading
Bill of lading is a document issued by master of the ship or the ship owner or other
agent in exchange of mate receipt after the goods are placed on board the ship.
Content of Bill of lading
1. It must be stamped and signed by the ship owner or his agent
2. The lading marks necessary for the identification of the goods
3. The number of packages or pieces, quantity or weight in writing by the shipper
4. The statement about the condition of the goods
5. The name of the ship, port of shipment, port of delivery and receiver.
6. Accepted Peril clause
7. Amount of freight
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Carriage of Goods by Sea

Kinds of Bill of lading (BOL)

• Clean BOL : When it is stated good receive are in clean order.

• Qualified BOL: When it is stated goods received are in bad condition.
• Through BOL: When Cargo partly carried by sea and partly by land.

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Carriage of Goods by Sea

• Duties of Carriage by Sea

1. The carrier shall be bound, before and at the beginning of the voyage to exercise due
diligence.
a) Make the ship worthy
b) Properly man equipped and supply the ship
c) Make the hold refrigerating and cool chamber and all other parts fit for reception
carriage and preservation.
2. The carrier must carefully load, stow, carry, keep, care for and discharge of the goods
3. After receiving the Goods carrier must issue BOL

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Carriage of Goods by Sea
Liabilities of Carrier by Sea
• The ship owner is liable for loss arising from his negligence.
• The ship owner cannot limit his liability.
• The carrier shall not be liable unless the nature and value of goods are declared by
the shipper in the BOL
• The carrier shall not be liable for any damage to the goods if the nature or the value
has been misstated by the shipper in the BOL.
• If the dangerous goods are loaded without the consent of the carrier, they can be
landed at any place and no compensation shall be paid to the shipper.
• The carrier shall be discharge from any liability unless suit is filled within one year.
• The carrier is not responsible for loss due to unavoidable circumstances.

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Carriage of Goods
by Air

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Carriage of Goods by Air
Carriage of Goods by Air
The law on the subject carried in Carriage by Air act 1934. This Act contains two schedules.
Schedule 1 contains the Warsaw Convention Rule, Schedule 2 covers Hague protocol.

High Contracting parties

It means the Government of all countries which are signatory to the Warsaw Convention rules.
Pakistan is Signatory

International Carriage
The place of departure and the destination are located between the two High contracting
parties.

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Carriage of Goods by Air

• Domestic Carriage
Following documents are to be issued when the goods and passengers are intended
to be carried by Air.
Passenger ticket
Luggage Ticket
Airway Bill (Air Consignment Note)

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