BILL OF LADING

Types of Bill of Lading

Foul Bill of Lading

Bill of lading with restrictive clauses are called "foul bills of lading" or "unclean bills of lading" , " claused bills of lading" or "dirty bills of lading" .

As stated above, we can assume that when the mate's receipt is clean, the bill of lading will also be clean. On the other hand, if the mate's receipt is foul, the bill of lading will also be foul.

Foul bills of lading are non-negotiable and are not accepted by banks. The bank will only pay the seller when he produces a full set of clean on board bills of lading . This means that the seller must receive clean on board bills of lading from the company or the shipping agent. This condition is clearly indicated on the shipping permit, mate's receipt and other similar documents. (See copy of a shipping permit.)

Important remark

It is senseless to be vague when restrictive clauses are entered into the bill of lading. All restrictive clauses must be detailed and limited:

not "bundles loose" but seven bundles loose" or "all bundles loose";
not "some bars rusty" but "eight bars rusty";
not "some barrels damaged" but "three barrels dented and leaking".

For most goods, the P & I Clubs and the insurance companies publish lists with standard clauses which are generally accepted by the courts. It is highly recommended to use these standard formulas rather than give one's own description of the apparent condition of the goods, in order to avoid differences in interpretation and misunderstandings with regard to the used terminology or the descriptions made.

For the description of a shipment of steel, which shows traces of rust, following clauses can be used:

— Partly rust stained;
— Rust stained;
— Rust spots apparent;
— Some rust spots apparent;
— Rust spots apparent on top sheets;
— Rusty edges;
— Some rusty ends;
— Rust and oil spotted;
— Wet before shipment;
— Covered with snow;
— Edges bent and rusty;
— Covers rusty/wet;
— Etc.

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