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Legality of a Bill of Lading for Damaged Cargo

Entrepreneurs who purchase the goods they sell encounter all sorts of logistics problems every day. The validity of a bill of lading is just one of them.

This document attesting to the receipt by the carrier of the articles to be transported is considered clean if it does not have any annotations as regards the state of the cargo it refers to. On the other hand, if the master of the boat believes that the actual condition does not reflect the description on the commercial paper, then he or she may insert qualifying words (such as dirty, foul, or claused) pertaining to the deficiency.

Legally, the boat’s master is justified in not signing the bill if the shipper or charterer does not accurately describe the freight. In practice, however, it is acceptable for the wordings to be negotiated in order to remove doubt on the cargo’s integrity.

Before shipping the merchandise though, the sender signs a written undertaking to indemnify the carrier in case it would incur any responsibility for issuing a clean document. This agreement protects the boat from any lawsuit that might be instituted against it for receiving damaged items despite the spotless document. Take note that the injured third party has a valid reason to rely on the alleged good order stated in the paper.

However, the practice of using letters of indemnity is also fraught with risk. Some foreign courts refuse to give them force, thus leaving the shipowners with nothing to secure their claim. Also, some cases have held that such agreements are tantamount to contracts defrauding third parties.

Hence, as a wise entrepreneur, you should take advantage of neutral tracking services that manage the chances of being sold unsuitable products. Find out how this website help provide the right solution to your logistics problems.