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Transportation Contracting (or Not)?

Historically, the Bill of Lading was considered by law and by the transportation and shipping industry to be the contract of carriage.  The purpose of the Bill of Lading was to state the material terms of the transportation agreement and resolve disputes between the involved parties. When issues arose, such as cargo damage, mis-delivery, shortage, or the responsible party to pay, the Bill of Lading was the document that provided the answers. 

Over the years there have been various standard forms of Bills of Lading, all of which included significant terms. For instance, a limitation of liability provision in a Bill of lading may limit the carrier’s liability for freight loss or damage to several hundred dollars in instances where the freight being transported may be worth hundreds of thousands of dollars.  If the carrier is being paid $500 to transport a shipment, why would a carrier agree to be liable for thousands of dollars for a loss?

Over the past years, various issues have been prevalent with Bills of Lading.  Many carriers and shippers never took the time to read their Bill of Lading.  When issue did arise it often resulted in costly surprises and litigation. In many cases, there are multiple Bills of Lading for the same shipment, possibly one prepared by the shipper, another by the carrier, and another by a logistics company.  So, which Bill took precedence often required court intervention.

Today, we have new issues brought on by technological advances.  Many (maybe most) shipments are not even covered by a Bill of Lading or transportation agreement.  With software advances, shipments are arranged via the internet or specialized software.  Likewise, billing of completed movements is computerized and handled over the internet or through software.  What are the terms governing the transportation when there is no Bill of Lading or transportation contract? 

Fortunately, these issues rarely arise, but when they do arise they can be very time consuming and expensive, not to mention the possible loss of a good shipper when a dispute arises.

Should you have any questions about Bills of Lading and their impact on your transportation business and other transportation law related matters, please do not hesitate to our transportation law attorneys.

This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice.  For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (Photo Credit depositphoto.com.)


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