CONTRACT ACT 1872 CONTRACT ACT 1872. What is a contract ? What is a contract ? Agreement + ...

CONTRACT ACT CONTRACT ACT 18721872

What is a contract ?What is a contract ?

AgreementAgreement

++ EnforceableEnforceable

What is an What is an agreement ?agreement ?

Proposal Proposal AcceptanceAcceptance

ConsiderationConsideration

When is an agreement When is an agreement enforceable?enforceable?

Competent partiesCompetent parties Free consentFree consent Lawful object and considerationLawful object and consideration Agreement not expressly Agreement not expressly

declared void by lawdeclared void by law

Proposal + AcceptanceProposal + Acceptance Agreement Agreement

Consideration

CONTRACT

Competent parties

Free consent

Lawful object and consideration

Agreement not expressly declared void by law

Enforceability

ProposalProposal

ProposalProposal

DefinitionDefinition

Requisites of Requisites of ProposalProposal

Express or Implied Express or Implied To whom made ? To whom made ? Act or abstinence Act or abstinence Assent of offerAssent of offer Legal obligationLegal obligation CommunicationCommunication

Proposal (contd…)Proposal (contd…)

Counter offerCounter offer

An offer to an offer


Invitation to offerInvitation to offer

Display of goods in a shop Display of goods in a shop

Catalogue quoting price of goodsCatalogue quoting price of goods

Tender noticeTender notice

Issue of proposal form by insurance Issue of proposal form by insurance companycompany

Auctioneer’s announcement to sell goods by Auctioneer’s announcement to sell goods by auctionauction


Letter of IntentLetter of Intent


Communication of proposalCommunication of proposal

When it comes to the knowledge of the When it comes to the knowledge of the person to whom it is madeperson to whom it is made


Revocation of the ProposalRevocation of the Proposal

Before other party accepts itBefore other party accepts it


Communicating notice of revocationCommunicating notice of revocation

Lapse of timeLapse of time

Failure to fulfill condition precedentFailure to fulfill condition precedent

Death or insanity of proposerDeath or insanity of proposer

How revoked ?How revoked ?


acceptanceacceptance

AcceptanceAcceptance

Definition Definition

EssentialsEssentials Absolute and unconditional Absolute and unconditional Mode of AcceptanceMode of Acceptance Mental Acceptance Mental Acceptance Express or ImpliedExpress or Implied Acceptance of all termsAcceptance of all terms

Acceptance (contd…) Acceptance (contd…)

Communication of acceptanceCommunication of acceptance


REVOCATION OF ACCEPTANCEREVOCATION OF ACCEPTANCE



Definition Definition At the desire of the promisorAt the desire of the promisor Move from the promisee or any Move from the promisee or any

other personother person Act or AbstinenceAct or Abstinence Past, present, futurePast, present, future

ADEQUACY OF ADEQUACY OF CONSIDERATIONCONSIDERATION

Consideration (contd…)Consideration (contd…)

Agreements not supported Agreements not supported by consideration and three by consideration and three

exceptions.exceptions.

Consideration (contd…)Consideration (contd…)

PRIVITY PRIVITY OF OF

CONTRACTCONTRACT

PRIVITY OF CONTRACTPRIVITY OF CONTRACT

Doctrine based on rights in personnamDoctrine based on rights in personnam

Exceptions (10)Exceptions (10)

Holder of a bill of lading Holder of a bill of lading

Holder of a negotiable Holder of a negotiable instrumentinstrument

Agreement

Valid Voidable Void Illegal Unenforceable

TYPES OF TYPES OF AGREEMENTSAGREEMENTS

WHEN IS AN AGREEMENT WHEN IS AN AGREEMENT ENFORCEABLEENFORCEABLE

Competent partiesCompetent parties

Free consentFree consent

Lawful object and considerationLawful object and consideration

Agreement not expressly declared Agreement not expressly declared void by lawvoid by law

Competent parties

Major Sound mind Not disqualified

Online ContractsConsequences of entering into a contract with a minor

COMPETENT PARTIESCOMPETENT PARTIES

What is Consent?What is Consent?

Agreeing to the same thing in the Agreeing to the same thing in the same sensesame sense

Meeting of the mindsMeeting of the minds ‘‘Consensus ad idem’ Consensus ad idem’


Free consent (contd…) Free consent (contd…)

When is consent free? When is consent free?

When not induced by: When not induced by: CoercionCoercion Undue influenceUndue influence FraudFraud MisrepresentationMisrepresentation MistakeMistake

CoercionCoercion

Committing or threatening to commit act Committing or threatening to commit act forbidden by IPCforbidden by IPC

OROR


Unlawfully detaining or threatening Unlawfully detaining or threatening to detain property of other to his to detain property of other to his prejudiceprejudiceImmaterial whether IPC is/is not in Immaterial whether IPC is/is not in force at place of coercion force at place of coercion

ANDAND Unfair advantageUnfair advantage Burden of ProofBurden of Proof


Domination of Will

Real, apparent authority Fiduciary relation Mental capacity

Undue InfluenceUndue Influence

FraudFraud

Suggestio falsiSuggestio falsi Suppressio VeriSuppressio Veri Promise made without any intention of Promise made without any intention of

performing itperforming it Any act fit to deceiveAny act fit to deceive Act/omission declared fraudulent by Act/omission declared fraudulent by

lawlaw


MisrepresentationMisrepresentation

Unwarranted StatementUnwarranted Statement

Breach of dutyBreach of duty

Inducing mistake about subject-Inducing mistake about subject-mattermatter



MISTAKEMISTAKE

Fact Law

Bilateral Unilateral

Consideration Consideration and and

objectobject

Consideration and objectConsideration and object

Consideration and object lawful unless:Consideration and object lawful unless:

Forbidden by lawForbidden by law

Defeat any lawDefeat any law

FraudulentFraudulent

Injury to person or propertyInjury to person or property

Immoral or opposed to public policyImmoral or opposed to public policy

VOID VOID AGREEMENTSAGREEMENTS

VOID AGREEMENTSVOID AGREEMENTSAgreements in Restraint of TradeAgreements in Restraint of Trade

ExceptionsExceptions1.1. Sale of business along with goodwill.Sale of business along with goodwill.

2.2. Contracts of serviceContracts of servicea.a. During the continuation of contractDuring the continuation of contract

b.b. After the conclusion of contractAfter the conclusion of contract

Agreements in Restraint of Legal ProceedingsAgreements in Restraint of Legal Proceedings

Absolute restraint Absolute restraint

Limiting the timeLimiting the time

Exception – ADRException – ADR

Hague Rules Article III Rule 6: Unless notice of loss or Hague Rules Article III Rule 6: Unless notice of loss or damage… is given in writing at the port of discharge or at damage… is given in writing at the port of discharge or at the time of removal of the goods.... Such removal shall be the time of removal of the goods.... Such removal shall be prima facie evidence of delivery by the carrier of the goods prima facie evidence of delivery by the carrier of the goods as described in the bill of lading.as described in the bill of lading.

In any event the carrier and the ship shall be discharged In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is from all liability in respect of loss or damage unless suit is brought within 1 year after delivery of goods……brought within 1 year after delivery of goods……

VOID AGREEMENTS (contd…)VOID AGREEMENTS (contd…)

Uncertain agreementsUncertain agreements

Arbitration Clauses Arbitration Clauses


Doctrine of FrustrationDoctrine of Frustration

Initial impossibility Initial impossibility Subsequent impossibility/illegalitySubsequent impossibility/illegality


Destruction of subject-matter of ContractDestruction of subject-matter of Contract Non-occurrence of event essential to Non-occurrence of event essential to contractcontract Death/illness of promisorDeath/illness of promisor Commercial hardship not Commercial hardship not recognizedrecognized Charter partiesCharter parties

Govt./Legislative interventionGovt./Legislative intervention

Performance Performance of of

contractcontract

Performance of contractPerformance of contract

Who must perform?Who must perform?

Mode of performanceMode of performance

Consequence of non-performanceConsequence of non-performance Anticipatory breach of contractAnticipatory breach of contract

REMEDIES FOR

BREACH OF

CONTRACT

Remedies

Damages Specific performance Injunction

REMEDIES FOR BREACH

OF CONTRACT

DamagesDamages

Rules governing measure of damages:Rules governing measure of damages: Damages for direct lossDamages for direct loss Remoteness of damageRemoteness of damage Duty to mitigate the lossDuty to mitigate the loss

REMEDIES FOR BREACH

OF CONTRACT (CONTD…)

Liquidated Damages Liquidated Damages

and and

Penalty Penalty

REMEDIES FOR BREACH

OF CONTRACT (CONTD…)

QUASI CONTRACTSQUASI CONTRACTS Based on equitable doctrine of Based on equitable doctrine of

unjust enrichmentunjust enrichment

Supply of necessaries to a person Supply of necessaries to a person incapable of contracting.incapable of contracting.

Payment by interested person Payment by interested person Liability to pay for non-gratuitous actLiability to pay for non-gratuitous act Finder of goods Finder of goods Payment or delivery under mistake or Payment or delivery under mistake or

coercioncoercion

SALE OF GOODS SALE OF GOODS ACT 1930ACT 1930

The Act codifies the law The Act codifies the law relating to sale of goods which relating to sale of goods which was contained in sections 76 to was contained in sections 76 to

123 123 of Contract Act. Those of Contract Act. Those

sections have been repealed by sections have been repealed by the SGAthe SGA

Parties are at a liberty to Parties are at a liberty to subject subject

the contract of sale the contract of sale to to

the law of the country of the law of the country of their choicetheir choice

Choice may be expressly Choice may be expressly stated by parties stated by parties

or or determined by Courtdetermined by Court

Two important presumptions Two important presumptions made by Courts:made by Courts:

Law of the place of making the contract - Law of the place of making the contract - lex loci contractu lex loci contractu

Law of the place of performing the Law of the place of performing the contract - lex loci solutionscontract - lex loci solutions

Transfer of property in goods Transfer of property in goods under sales made in foreign under sales made in foreign

countries is in general countries is in general regulated by the law of the regulated by the law of the

place where goods are situated place where goods are situated at the time of saleat the time of sale

Admissibility of evidence, Admissibility of evidence, enforceability of contract, enforceability of contract,

procedure - procedure - lex forilex fori or or

law of the place law of the place where action is brought where action is brought

Foreign law presumed to be Foreign law presumed to be same as municipal law. same as municipal law.

If different, foreign law must be If different, foreign law must be proved as a fact by the party proved as a fact by the party

relying upon foreign law.relying upon foreign law.

FORMATION OF CONTRACTFORMATION OF CONTRACT

Contract of Sale

Sale Agreement to Sell

FormalitiesFormalities Formation Formation Offer Offer Acceptance Acceptance Provision for delivery of goodsProvision for delivery of goods Provision for payment of priceProvision for payment of price

How made?How made? Writing Writing Oral Oral Partly written and partly oralPartly written and partly oral Implied from conduct of parties or course of Implied from conduct of parties or course of

their businesstheir business

Subject-matter - GoodsSubject-matter - Goods

Subject-matter - Goods

Existing Contingent Future

Specific or ascertained Generic or unascertained

Goods perishing before making Goods perishing before making of contractof contract

Goods perishing before sale but Goods perishing before sale but after agreement to sellafter agreement to sell

EFFECT OF GOODS EFFECT OF GOODS PERISHINGPERISHING

BEFORE MAKING OF BEFORE MAKING OF CONTRACTCONTRACT

Contract for specific goods only Contract for specific goods only Goods damaged, destroyed, seller Goods damaged, destroyed, seller

depriveddeprived Before contract of sale is madeBefore contract of sale is made Without knowledge of sellerWithout knowledge of seller

Void AgreementVoid Agreement

BEFORE SALE BUT AFTER BEFORE SALE BUT AFTER AGREEMENT TO SELLAGREEMENT TO SELL

Specific goodsSpecific goods Goods perishingGoods perishing Perishing after agreement but before Perishing after agreement but before

salesale Without fault of seller or buyerWithout fault of seller or buyer

Agreement can be avoidedAgreement can be avoided

PRICEPRICE Ascertainment of priceAscertainment of price

Fixed by contractFixed by contract Left to be fixed in agreed manner (market price)Left to be fixed in agreed manner (market price) Course of dealings between partiesCourse of dealings between parties Reasonable priceReasonable price

Price fixed by valuation of third party.Price fixed by valuation of third party.

Unless different intention appears, Unless different intention appears, stipulations as to time of payment not stipulations as to time of payment not deemed to be essence of contracts.deemed to be essence of contracts.

Whether any other stipulation as to time is Whether any other stipulation as to time is of essence of contract or not depends on of essence of contract or not depends on terms of contract.terms of contract.

CONDITIONS AND CONDITIONS AND WARRANTIESWARRANTIES

Condition Condition

A stipulation essential to main purpose of A stipulation essential to main purpose of contract, breach gives rise to a right to contract, breach gives rise to a right to repudiate contract.repudiate contract.

WarrantyWarranty

A stipulation collateral to main purpose of A stipulation collateral to main purpose of contract, breach gives rise to claim for contract, breach gives rise to claim for damages.damages.

implied conditions and implied conditions and warrantieswarranties

Implied undertaking as to title, etc.Implied undertaking as to title, etc.

Implied conditions when sale is by Implied conditions when sale is by descriptiondescription

No implied conditions as to quality or fitnessNo implied conditions as to quality or fitness

Implied conditions when sale is by sampleImplied conditions when sale is by sample

IMPLIED IMPLIED CONDITIONS/WARRANTIES AS TO CONDITIONS/WARRANTIES AS TO

TITLETITLE

Seller has/will have right to sell– conditionSeller has/will have right to sell– condition

Enjoy quiet possession of goods – Enjoy quiet possession of goods – warrantywarranty

Goods free from any charge or Goods free from any charge or encumbrance - warrantyencumbrance - warranty

IMPLIED CONDITIONS WHEN IMPLIED CONDITIONS WHEN SALE BY DESCRIPTIONSALE BY DESCRIPTION

Goods shall correspond with descriptionGoods shall correspond with description

If sale is by sample as well as by If sale is by sample as well as by description, it is not sufficient that the description, it is not sufficient that the bulk corresponds with sample if goods do bulk corresponds with sample if goods do not also correspond with descriptionnot also correspond with description

Description includes quality or fitness, Description includes quality or fitness, place of shipment, time of dispatch or place of shipment, time of dispatch or delivery, time of shipment, mode of delivery, time of shipment, mode of packing.packing.

NO IMPLIED NO IMPLIED CONDITION/WARRANTY AS TO CONDITION/WARRANTY AS TO

QUALITY OF FITNESSQUALITY OF FITNESSException 1Exception 1

Implied condition as to quality/fitness when:Implied condition as to quality/fitness when:

Buyer expressly/impliedly makes known to seller the purposeBuyer expressly/impliedly makes known to seller the purpose Buyer shows he relies on seller’s skill and judgment Buyer shows he relies on seller’s skill and judgment

And And Goods are of a description dealt with by seller (manufacturer or Goods are of a description dealt with by seller (manufacturer or

not)not)

Exception to Exception 1Exception to Exception 1

No implied condition when article sold under its patent or trade No implied condition when article sold under its patent or trade namename


QUALITY OF FITNESSQUALITY OF FITNESS

Exception 2Exception 2

Implied condition as to merchantableness when :Implied condition as to merchantableness when :

Goods bought by description Goods bought by description From seller who deals in goods of that description From seller who deals in goods of that description (manufacturer (manufacturer

or not)or not)

Exception to Exception 2Exception to Exception 2

If buyer has examined the goods, no implied condition as If buyer has examined the goods, no implied condition as regards defects which examination ought to have revealedregards defects which examination ought to have revealed


QUALITY OF FITNESSQUALITY OF FITNESS

Exception 3Exception 3An implied warranty or condition as to quality An implied warranty or condition as to quality or fitness for a particular purpose may be or fitness for a particular purpose may be annexed by usage of trade.annexed by usage of trade.

IMPLIED CONDITIONS WHEN IMPLIED CONDITIONS WHEN SALE BY SAMPLESALE BY SAMPLE

Bulk shall correspond with sample in quality Bulk shall correspond with sample in quality

Buyer to have reasonable opportunity of Buyer to have reasonable opportunity of comparing bulk with samplecomparing bulk with sample

Goods free from defect, rendering them Goods free from defect, rendering them unmerchantable, which would not be unmerchantable, which would not be apparent on reasonable examination of apparent on reasonable examination of sample.sample.

TRANSFER OF PROPERTYTRANSFER OF PROPERTYGeneric goodsGeneric goods

Goods must be ascertainedGoods must be ascertained

Generic GoodsGeneric Goods

Property passes when intended to passProperty passes when intended to pass

Specific goods in a deliverable state Specific goods in a deliverable state

Specific goods to be put into a deliverable Specific goods to be put into a deliverable statestate

Specific goods in a deliverable state, when Specific goods in a deliverable state, when the seller has to do anything in order to the seller has to do anything in order to ascertain price ascertain price

TRANSFER OF PROPERTY – TRANSFER OF PROPERTY – SPECIFIC GOODSSPECIFIC GOODS

Contract for sale of unascertained or future Contract for sale of unascertained or future goods by description goods by description

Goods in a deliverable state Goods in a deliverable state Goods unconditionally appropriated to contract Goods unconditionally appropriated to contract

by delivery to buyer or carrier by delivery to buyer or carrier Appropriation by seller with assent of buyer or Appropriation by seller with assent of buyer or

by buyer with assent of seller by buyer with assent of seller Assent express or implied Assent express or implied Assent before or after appropriationAssent before or after appropriation

TRANSFER OF PROPERTYTRANSFER OF PROPERTY Sale of unascertained goods and Sale of unascertained goods and appropriation, Delivery to carrierappropriation, Delivery to carrier

Property passes on appropriationProperty passes on appropriation

WHEN UNCONDITIONAL WHEN UNCONDITIONAL APPROPRIATION?APPROPRIATION?

Seller delivers goods to buyer/carrier/Seller delivers goods to buyer/carrier/

bailee (whether named by buyer or not)bailee (whether named by buyer or not)

Delivery is pursuant to the contractDelivery is pursuant to the contract

Delivery is for purpose of transmission to Delivery is for purpose of transmission to buyerbuyer

Seller does not reserve the right of Seller does not reserve the right of disposaldisposal

CONDITIONAL CONDITIONAL APPROPRIATIONAPPROPRIATION

Where seller will not part with the Where seller will not part with the goods until he is paid.goods until he is paid.

Where seller ships goods as per Where seller ships goods as per contract but takes out bill of lading to contract but takes out bill of lading to his own order or to the order of his his own order or to the order of his agent. (reserving the right of agent. (reserving the right of disposal)disposal)

PASSING OF PROPERTY – PASSING OF PROPERTY – APPROVAL BASIS OR SALE OR APPROVAL BASIS OR SALE OR

RETURNRETURN

Property passes when buyerProperty passes when buyer : : Signifies his approval/acceptance to Signifies his approval/acceptance to

seller seller

Does any act, adopting the transactionDoes any act, adopting the transaction

Retains goods without giving notice or Retains goods without giving notice or rejection.rejection.

TRANSFER OF TITLETRANSFER OF TITLE Nemo dat quod non habet- No one can Nemo dat quod non habet- No one can

give what he does not possessgive what he does not possess

Sale by person not owner – ExceptionsSale by person not owner – Exceptions

Title by estoppelTitle by estoppel Sale by mercantile agentSale by mercantile agent

Sale by one of the joint ownersSale by one of the joint owners

Sale by a person in possession under voidable contractSale by a person in possession under voidable contract

Sale by a seller in possession after saleSale by a seller in possession after sale

Sale by a buyer in possession before saleSale by a buyer in possession before sale

Performance of contractPerformance of contract

Duties of seller and buyerDuties of seller and buyer Payment and delivery are concurrent conditionsPayment and delivery are concurrent conditions DeliveryDelivery Effect of part deliveryEffect of part delivery Buyer to apply for deliveryBuyer to apply for delivery Rules as to deliveryRules as to delivery Delivery of wrong quantityDelivery of wrong quantity Installment deliveryInstallment delivery Delivery to carrier or wharfingDelivery to carrier or wharfing Risk where goods are delivered at distant placeRisk where goods are delivered at distant place AcceptanceAcceptance Buyer not bound to return rejected goodsBuyer not bound to return rejected goods Liability of buyer for neglecting or refusing delivery of Liability of buyer for neglecting or refusing delivery of

goods.goods.

RIGHTS OF UNPAID SELLER RIGHTS OF UNPAID SELLER AGAINST GOODSAGAINST GOODS

Rights of Unpaid Seller Against Goods

LIENLien, When?Part Delivery

Termination of Lien

STOPPAGE IN TRANSITRight, When?

Duration of TransitHow effected?

RESALE

Who is a seller?Who is a seller?

When is seller unpaid?When is seller unpaid?

What are his rights vis-à-vis goods?What are his rights vis-à-vis goods?

FOBFOBANDAND

CIF CONTRACTSCIF CONTRACTS

Ex-Works or Ex-Factory………………….. Free Ex-Works or Ex-Factory………………….. Free delivereddelivered

In between host of contractsIn between host of contracts

Most important FOB, CIFMost important FOB, CIF

FOB AND CIF CONTRACTS

FOB CONTRACTSFOB CONTRACTS Pyrene V/s Scindia Navigation 1945 Pyrene V/s Scindia Navigation 1945

QB, All. E. R.QB, All. E. R.

Flexible instrument- not susceptible to rigid Flexible instrument- not susceptible to rigid definitiondefinition Central idea-price paid to seller includes all Central idea-price paid to seller includes all costs up costs up to loading in a ship nominated by buyer.to loading in a ship nominated by buyer. Normally property and risk passes when goods Normally property and risk passes when goods cross cross the ship’s railthe ship’s rail Incidents can be varied without losing its essential Incidents can be varied without losing its essential nature.nature.

FOB contracts:FOB contracts:

FOB CONTRACTS (contd…)FOB CONTRACTS (contd…)

Classic/strictClassic/strict

ModernModern

Seller’s dutiesSeller’s duties


Ship free on board goods as described in Ship free on board goods as described in contract of contract of sale on the nominated vessel at the port of sale on the nominated vessel at the port of loadingloading Pay all costs for handling and transport till Pay all costs for handling and transport till goods on goods on boardboard

The Buyer’s dutiesThe Buyer’s duties


Advise seller in good time on what ship goods Advise seller in good time on what ship goods are to are to be shippedbe shipped Designate/nominate a shipDesignate/nominate a ship

Secure shipping spaceSecure shipping space

Obtain export licenseObtain export license

Enter and declare the goods with customs Enter and declare the goods with customs authoritiesauthorities

GoodsGoods Port of loadingPort of loading Nomination of shipNomination of ship DeliveryDelivery LoadingLoading Passing of PropertyPassing of Property Administrative duties and paymentsAdministrative duties and payments

Brandt & Co. V/s Morris (1917) KB,Brandt & Co. V/s Morris (1917) KB, Pound & Co. V/s Hardy & Co., (1956) AC (HL)Pound & Co. V/s Hardy & Co., (1956) AC (HL)

PaymentPayment


CIF CONTRACTSCIF CONTRACTSClassical judicial definition of CIF given by Classical judicial definition of CIF given by

Atkinson Atkinson in Johnson V/s Taylor Bros. [1920] AC 144.in Johnson V/s Taylor Bros. [1920] AC 144.

Make out an invoice of goods soldMake out an invoice of goods sold Ship at port of shipment goods of contract descriptionShip at port of shipment goods of contract description Procure a contract of affreightmentProcure a contract of affreightment Arrange for an insurance policyArrange for an insurance policy Forward and tender to the buyer shipping documentsForward and tender to the buyer shipping documents

The seller may sell on cif terms goods which he has The seller may sell on cif terms goods which he has shipped or may himself buy goods already shipped and shipped or may himself buy goods already shipped and then sell them cif. Hence he may not be able to plead an then sell them cif. Hence he may not be able to plead an export ban as frustrating his contract as he can buy goods export ban as frustrating his contract as he can buy goods already shipped.already shipped.

Difference between fob with Difference between fob with additional duties and cif contract additional duties and cif contract

CIF CONTRACTS (CONTD…)CIF CONTRACTS (CONTD…)

A sale of documents? A sale of documents?


Documents in CIF contractsDocuments in CIF contracts


InvoiceInvoice

Bill of LadingBill of Ladingo Substitute for Bill of LadingSubstitute for Bill of Lading

Policy of insurancePolicy of insuranceo Certificate of InsuranceCertificate of Insurance

LAW RELATING LAW RELATING TO TO

SEA TRANSPORTSEA TRANSPORT

CHARTER PARTYCHARTER PARTY

CONTRACT OF AFFREIGHTIMENT

Charter-Party Bill of Lading

Voyage DemiseTime

Implied undertakings in charter parties

Frustration of charter party

DefinitionDefinition

HistoryHistory

BILL OF LADINGBILL OF LADING

FunctionsFunctions

BILL OF LADING (CONTD…)BILL OF LADING (CONTD…)

Receipt- goods received or shipped?Receipt- goods received or shipped?

o Leading marks for identificationLeading marks for identificationo No of pieces/packages, quantity, wtNo of pieces/packages, quantity, wto Apparent order and conditionApparent order and condition

Document of title to the goodsDocument of title to the goods

Quasi – negotiable Quasi – negotiable instrumentinstrument

Contract or evidence of contract?Contract or evidence of contract?

Section 3 of Bill of Lading Act, 1856Section 3 of Bill of Lading Act, 1856

Every bill of lading in the hands of a consignee or endorsee Every bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods to have for valuable consideration, representing goods to have been shipped on board a vessel, shall be been shipped on board a vessel, shall be conclusive conclusive evidenceevidence of such shipment as against the of such shipment as against the master or master or other person signingother person signing the same, notwithstanding that the same, notwithstanding that such goods or some parts there of may not have been so such goods or some parts there of may not have been so shipped, unless such holder of the bill of lading shall have shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the had actual notice at the time of receiving the same that the goods had not in fact been laden on board; Provided that goods had not in fact been laden on board; Provided that the master or other person so signing may exonerate the master or other person so signing may exonerate himself, in respect of such misrepresentation by showing himself, in respect of such misrepresentation by showing that it was caused without any default on his part, and that it was caused without any default on his part, and wholly by the fraud of the shipper, or of the holder or some wholly by the fraud of the shipper, or of the holder or some person under whom the holder claims.person under whom the holder claims.


Section 1 of Bill of Lading Act, 1856Section 1 of Bill of Lading Act, 1856

Every Every consigneeconsignee of goods named in a bill of of goods named in a bill of lading and every lading and every endorseeendorsee of a bill of lading of a bill of lading to whom the to whom the property in the goodsproperty in the goods therein therein mentioned shall pass, upon or mentioned shall pass, upon or by reason of by reason of such consignment or endorsementsuch consignment or endorsement shall shall have transferred to and vested in him all have transferred to and vested in him all rights of suit, and be subject to the same rights of suit, and be subject to the same liabilities in respect of such goods as if the liabilities in respect of such goods as if the contract contained in the bill of ladingcontract contained in the bill of lading had been made with himself.had been made with himself.


INTERNATIONAL CONVENTIONSINTERNATIONAL CONVENTIONS

Hague Rules 1924Hague Rules 1924

Hague-Visby Rules 1968 (in force in 1977)Hague-Visby Rules 1968 (in force in 1977)

Protocol amending HV Rules 1979 (in force in Protocol amending HV Rules 1979 (in force in 1984)1984)

Hamburg Rules 1978 (in force 1992 November)Hamburg Rules 1978 (in force 1992 November)

UN Convention on International Multimodal UN Convention on International Multimodal Transport of Goods, 1980 (not yet operative)Transport of Goods, 1980 (not yet operative)

DOMESTIC LAWSDOMESTIC LAWS

Bill of Lading Act, 1856Bill of Lading Act, 1856

Carriage of Goods by Sea Act 1925Carriage of Goods by Sea Act 1925

Multimodal Transportation of Goods Act, Multimodal Transportation of Goods Act, 1993, Amendment in 20001993, Amendment in 2000

Rules relating to Bills of Lading:Rules relating to Bills of Lading:

ARTICLE II:ARTICLE II:

Subject to the provisions of Article VI, under every Subject to the provisions of Article VI, under every contract of carriage…………….. hereinafter set contract of carriage…………….. hereinafter set forth.forth.

ARTICLE VI:ARTICLE VI:

Special Conditions:Special Conditions:Notwithstanding the provisions of the preceding Notwithstanding the provisions of the preceding Articles, a carrier…… shall be at liberty to enter Articles, a carrier…… shall be at liberty to enter into any agreement in any terms as to into any agreement in any terms as to responsibility and liability of the carrier….responsibility and liability of the carrier….

Hague/Hague-Visby RulesHague/Hague-Visby Rules

ARTICLE III:ARTICLE III:

Rule 1:Rule 1:The carrier shall be bound before and at the The carrier shall be bound before and at the beginning of the voyage to exercise due diligence beginning of the voyage to exercise due diligence to make the ship seaworthy……to make the ship seaworthy……

Rule 2:Rule 2:Subject to the provisions of Article IVSubject to the provisions of Article IV, the carrier , the carrier shall properly and carefully load, handle ----- the shall properly and carefully load, handle ----- the goods.goods.

ARTICLE IV:ARTICLE IV:

Neither the carrier nor the ship shall be liable for Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from…………..loss or damage arising or resulting from…………..


ARTICLE III:ARTICLE III:

Rule 5:Rule 5:

The shipper shall be deemed to have The shipper shall be deemed to have guaranteedguaranteed to the carrier the accuracy at the to the carrier the accuracy at the time of shipment of the marks, no………time of shipment of the marks, no………And the shipper shall And the shipper shall indemnifyindemnify the carrier the carrier against all loss….. resulting from against all loss….. resulting from inaccuracies.inaccuracies.The right of the carrier to such indemnity shall The right of the carrier to such indemnity shall in no way in no way limit his responsibility/liabilitylimit his responsibility/liability under the carriage contract to any person under the carriage contract to any person other than the shipper.other than the shipper.


CONTRACT ACT 1872 CONTRACT ACT 1872. What is a contract ? What is a contract ? Agreement + ...

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