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TOPIC 1: UN CONVENTION ON CONTRACTS or of the President of the Court in the seller's country was of no relevance in

FOR INTERNATIONAL SALE OF GOODS (CISG jurisdictions where there is no this respect.
1980) national committee or group, with
- In view of the fundamental character of
alternate members appointed by the
Applicability of CISG: Place of business the breach by the seller the buyer was
World Council upon proposal of the
(Art.1) entitled to avoid the contract - Art 49(1)
President of the Court.
Art 1(a) - “This Convention applies to - The seller was not entitled to remedy by
contracts of sale of goods between parties supplying substitute goods in accordance
whose places of business are in different SCAFFOLD FITTINGS CASE with Art 48(1) since sole arbitrator opined
States: that the seller's right to cure after the date
F:- An Austrian buyer and a Chinese
for delivery is dependent on the consent of
when the States are Contracting States; or” seller entered into a contract for the
the buyer.
purchase of scaffold fittings. After
ICC Court of Arbitration - PARIS
delivery of the goods the buyer Art. 1(1)(a)
- ICA is an institution for the resolution of discovered serious defects and
international commercial disputes. declared the contract avoided. The
buyer claimed damages suffered F:- A Spanish, an Argentine and a U.S. co
- ICA is part of the ICC.
because it had been able to resell only concluded a contract with a British co for
- Court comprises more than 100 members part of the goods at a lower price. the sale of computer products to be
from about 90 countries. distributed throughout Latin America. A few
H:- The sole arbitrator held that the
- ICC HQ is in Paris, France. months later, a new company was
contract was governed by CISG, since
established as a result of the merger of the
- Court was founded in 1923 under the parties had their places of
British company and a Canadian one, the
leadership of the ICC's first president business in two different Contracting
buyers were notified that the contract
Étienne Clémentel, a former French Minister States - Art. 1(1)(a)
would be terminated in 90 days.
of Finance. -The fact that the buyer had
- Alleging breach of the original agreement,
- Members of the ICC Court are appointed conducted part of the negotiations
the buyers filed a suit against the sellers.
by the ICC World Council on the proposal of through its liaison office situated in
the local ICC 'national committee' or group
H:- Court denied that CISG was applicable, contract for the sale of wooden contract were all from Contracting States.
basing its reasoning on several arguments: products to be resold to P’s client in
1. Court stated that the contract had been GMBH
concluded between parties not all of whom - P also concluded a contract with
F:- A British Columbian manufacturer
were situated in Contracting States - Art another US corporation (Co-D) which
entered into a contract with an Austrian
1(1)(a) would provide services related to
subsidiary of a German seller for the sale of
quality control of the goods.
- Furthermore, Court recalled that the US a pre-expander and a block mould to be
had ratified CISG with the declaration that it - P brought an action against both US financed by a lease contract.
would not be bound by its Art. 1(1)(b) (Art. corporations alleging non-conformity
- After installation of the equipment,
95 CISG); consequently, the Convention is of goods and failure to inspect
although the buyer had received assurances
applicable solely when all the parties to the according to parties’ agreement.
that the equipment would produce EPS
contract are from Contracting States.
H:- As to the applicable law, the Court products compatible with Canadian testing
- Court could not find any precedent rejected the P’s argument that the requirements, the buyer found several flaws
allowing the application of CISG when a CISG applied to the merits of the in the blocks produced by means of the
subsequent party to the contract is situated dispute. Not only were the conditions seller’s equipment.
in a Contracting State. set forth by Art. 1(1)(a) CISG not
H:- As to the applicable law, the Court
satisfied, since neither the British
Art.1(1)(b) rejected the seller’s argument that the
Virgin Islands nor the United Kingdom
buyer had implicitly agreed to the
- when the rules of private international law are Contracting States, but also
application of German law. Court opined
lead to the application of the law of a application of the CISG by virtue of
that the mere fact that the seller’s
Contracting State. international private law rules had to
confirmation of order stated that delivery
PRIME START LTD v MAHER FOREST be excluded, since the USA made a
was to be carried out according to “General
PRODUCTS LTD reservation to Art. 1(1)(b) pursuant to
Terms of Delivery of the [seller]” did not
Art. 95.
F:- A British Virgin Islands corporation (P) mean that a choice-of-law clause in favor of
and US corporation (D) entered into a - As a result, the Convention could German law had been agreed upon by the
have applied only if the parties to the buyer.
- Instead, the law having the closest offeree before he has dispatched an Art 18(2) - an acceptance is not effective ‘if
relationship with the contract was the law acceptance.” the indication of assent does not reach the
of Ontario, Toronto being the place where Offeror within the time he had fixed….’
Art 17(2) - Termination of Offer:
the equipment had been installed and put
Rejection of Offer Followed by The offeror’s statement fixing the time for
into operation.
Acceptance. acceptance may be ambiguous if it states a
- British (UK), Germany and Canada – period of time (e.g., 15 days) for acceptance
“An offer (even if it is irrevocable) is
(application of Art 1 (1) (b). and does not specify when the period starts
terminated when a rejection reaches
to run or does not deal with the effect of
Part II: Formation of the Contract (Art 14 to the Offeror.”
Art 20 - Interpretation of Offeror’s Time
Art 18 - Criteria, time & manner for Limits for Acceptance
Art 14(1) - Criteria of an offer: assent:
Art 20(1) - A period of time for acceptance
“A proposal for concluding a contract “A statement or other conduct of the fixed by the offeror in a telegram or a letter
addressed to one or more specific persons offeree indicating assent to an offer is begins to run from the moment the
constitutes an offer if it is sufficiently an acceptance.” telegram is handed in for dispatch or from
definite and indicates the intention of the the date shown on the letter or, if no such
It “becomes effective at the moment
Offeror to be bound in case of acceptance.” date is shown, from the date shown on the
it reaches the Offeror. An acceptance
Art 15(1) - When offer becomes effective, is not effective if it does not reach the envelope.
prior withdrawal: Offeror within the time fixed, or Art 20(2) - A late acceptance is nevertheless
within a reasonable time.” effective as an acceptance if without delay
“It becomes effective when it reaches the
offeree.” Art 18(3) - If by virtue of the offer, the the offeror orally informs the offeree that
offeree may indicate assent by he considers his offer as having lapsed or
Art 16(1) - Revocability of Offer dispatches a notice to that effect.
performing an act, the acceptance is
“Until a contract is concluded, it may be effective at the moment the act is Art 22 - Withdrawal of Acceptance
revoked if the revocation reaches the performed.
An acceptance may be withdrawn if the damage to materials, loss of good will other or the settlement of disputes are
withdrawal reaches the Offeror before or at or any other consequential damages. considered to alter the terms of the offer
the same time the acceptance would have materially.
- The machinery was then delivered to
been effective.
buyer and shortly thereafter defects Art 24 - When communication ‘dispatches’
Art 19 - Acceptance with modifications caused a shutdown of buyer’s & ‘reaches’ the addressee
assembly plant causing serious
A reply to an offer which purports to be an An offer, declaration of acceptance or any
consequential damages. Will
acceptance but contains additions, other indication of intention “reaches” the
consequential damages be included in
limitations or other modifications is a addressee:
buyer’s measure of damages?
rejection of the offer and constitutes a
= when it is made orally to him or
counter-offer. - However, a reply to an offer which
purports to be an acceptance but = delivered by any other means to him
contains additional or different terms personally, to his place of business or
- Buyer sent to seller a purchase order for which do not materially alter the mailing address or
certain production machinery. The back of terms of the offer constitutes an = if he does not have a place of business or
the form stated that seller would be acceptance, unless the offeror, mailing address, to his habitual residence.
responsible for all damages incl without undue delay, objects orally to
consequential damages which resulting the discrepancy or dispatches a notice = no provision directly addresses when a
from defects in the machinery. to that effect. If he does not so object, communication is “dispatched.”

- In response, seller delivered to buyer its the terms of the contract are the Art 30 - Obligation of Seller
sales order (or acknowledgement) form that terms of the offer with the
General Obligation: Seller must deliver the
purported to accept buyer’s offer. modifications contained in the
goods, hand over any docs relating to them
- On the back of the form, it stated that & transfer the property in the goods, as
seller agreed to repair/replace any - Additional/different terms relating, required by the contract and this
machinery that proved to be defective, but among other things, to the price, Convention.
disclaimed liability for shutdown losses, payment, quality and quantity of the
Art 31 - Place of Delivery
goods, place and time of delivery,
extent of one party’s liability to the
- If the contract of sale involves carriage of over at the time and place and in the (b) are fit for any particular purpose
the goods—in handing the goods over to the form required by the contract. expressly/impliedly made known to the
first carrier for transmission to the buyer. seller at the time of the conclusion of the
- If the seller has handed over docs
contract, except where the circumstances
- Seller has duly performed its duty of before that time, he may, up to that
show that the buyer did not rely, or that it
delivery when the goods are handed over to time, cure any lack of conformity in
was unreasonable for him to rely, on the
the first carrier. the docs, if the exercise of this right
seller’s skill and judgement
does not cause the buyer
- If several subsequent carriers are involved,
unreasonable inconvenience or (c) possess the qualities of goods which the
handing over to the first carrier constitutes
unreasonable expense. seller has held out to the buyer as a sample
or model
- However, the buyer retains any right
Art 33 - Time of Delivery
to claim damages as provided for in (d) are contained or packaged in the
The seller must deliver the goods: this Convention. manner usual for such goods or, where
(a) if a date is fixed by or determinable from there is no such manner, in a manner
Art 35 - Conformity of the Goods
the contract, on that date; adequate to preserve and protect the
- Seller must deliver goods which are goods.
(b) if a period of time is fixed by or of the quantity, quality & description
determinable from the contract, at any time Art 35(3) - Seller is not liable under subpara
required by the contract and which
within that period unless circumstances (a) to (d) of the preceding para for any lack
are contained or packaged in the
indicate that the buyer is to choose a date; of conformity of the goods if, at the time of
manner required by the contract.
or the conclusion of the contract, the buyer
Art 35(2) - Except where the parties knew or could not have been unaware of
(c) in any other case, within a reasonable have agreed otherwise, the goods do such lack of conformity.
time after the conclusion of the contract not conform with the contract unless
Art 45 - Buyer’s Remedies
Art 34 - Handing over of Docs they:
If the seller fails to perform any of his
- If the seller is bound to hand over docs (a) are fit for the purposes for which
obligations under the Contract or this
relating to the goods, he must hand them goods of the same description would
Convention, the buyer may:
ordinarily be used
(a) exercise the rights provided in Art 46 to - If the contract is silent as to the - One of the major reasons for the
52; (Requiring performance; Avoidance; place of payment, Art 57(1) of the registration of ships is for the determination
reduction of price) default rule of CISG is that payment is of admiralty jurisdiction.
to be made at the seller’s place of
(b) claim damages as provided in Art 74 to - A fundamental principle of international
77. maritime law: jurisdiction over a vessel on
Art 61 - Seller’s Remedies the high seas resides exclusively with the
Art 45(2) - Buyer is not deprived of any right
state to which the vessels belong.
he may have to claim damages by exercising If the buyer fails to perform any of his
his right to other remedies. obligations under the Contract or this - All vessels using the high seas must
Convention, the seller may: possess a national character.
Art 53 - Obligation of Buyer
(a) Require SP of buyer - Art 62 - Possessing a national character is only
- Buyer must pay the price for the goods and
made possible by reason of registration.
take delivery of them as required by the (b) Avoidance - Art 64
contract and this Convention. Flags of Convenience
(c) Damages
Two main obligation of the Buyer: - refers to registering a ship in a sovereign
state different from that of the ship's
I. Pay the price for the goods
Art 2&4 UNCROS - every ship must be owners.
II. Take delivery of the goods registered in a particular National
- Ships registered under flags of
Payment of the Price convenience can often reduce operating
- There are the closed and open costs or avoid the regulations of the owner's
- An international sale contract normally
registers that exist all around the country. To do so, a vessel owner will find a
specifies not only the precise amount to be
world, based on the level of state nation with an open registry, or a nation
paid, but also the exact time and place of
protection and Regulation. that allows registration of vessels owned by
- There must be a “genuine link” foreign entities.
- In a letter of credit transaction, buyer must
between the ship and the State in - A ship operates under the laws of its flag
make payment upon the presentation of
which it is registered. state, so vessel owners often register in
documents demonstrating that conforming
goods have been shipped. other nations to take advantages of reduced
regulation, lower administrative fees, and I: whether a jet ski considered a vessel II. Pulau Pinang
greater numbers of friendly ports. for the purpose of navigation?
III. Kota Kinabalu
Ships H: No.
IV. Kuching
S.2 MSO on ‘Vessel’ - any ship or boat or THE GAS FLOAT WHITTON
V. Labuan
any other description of “vessel” used in
H: A boat-shaped gas float, moored in
navigation. 1. The TSR
tidal waters to give light, was held not
S.2 MSO on ‘Ship’ - includes every to be a ship for the purpose of PART IIA OF MSO - Ownership of a ship
description of “vessel” used in navigation salvage. registered on the TSR is restricted to:
not propelled by oars. (a) Malaysian citizen
Lord Hersell: “It was not constructed
What is a Vessel? for the purpose of being navigated. It (b) Malaysian-incorporated corporations
was in truth, a lighted buoy or beacon. where:
The suggestion that the gas stored in
F:- P was riding a jet ski in the vicinity of the float can be regarded as cargo (i) The principal office of the corporation is
Brighton Pier when he was involved in a carried by it is more ingenious than in Malaysia
collision with a speed boat. The collision was sound.” (ii) The management of the corporation is
caused by the negligence of the 1st D while carried out mainly in Malaysia
Registration of Ships in Malaysia
acting as servant/agent of the 2nd D.
- 2 types of vessels registration in (iii) The majority (currently 51%) of directors
- D contended that the law states that “no are Malaysian citizens and the majority of
action shall be maintainable to enforce any the shareholding of the corporation
claim against a vessel or her owners in 1. Traditional registration (TSR) (including voting shares) are held by
respect or loss to another vessel or damages Malaysians free from any trust or obligation
2. International registration (MISR)
for personal injuries suffered by any person in favour of non-Malaysians.
on board her caused by the fault of the - The ship registry is administered by
former vessel….” the Marine Department of Malaysia 2. The MISR
by 5 ports of registry: -Seeks to attract individuals & foreign
I. Port Klang shipping companies to register ships
through Labuan without the need to comply - No other ship other than a Effect of Registration
with the Malaysian majority shareholding Malaysian ship may engage in
requirement. Ships registered under MISR domestic shipping & a person not
will carry a Malaysian flag and are qualified to own a Malaysia ship as H:- Registration of ships has dual effect
considered as Malaysian ships. provided in S.11 cannot charter or - It gives an entitlement to all the privileges,
otherwise engage any Malaysia ship but an owner cannot, by failing to register,
Part IIC of the MSO - Specific requirements
for domestic shipping except under evade duties cast on such vessels.
for registering a ship or vessel under the
and in accordance with such
MISR. - Apart from the public matters, registration
conditions as the Minister may direct
What is a Malaysian ship? or prescribe. is also important as proof of title.

- S.2(a) has the meaning given to it in Part S.65KA: Liability on contravening the - The ship was sold by the seller to buyer
IIA (registry) prohibition on domestic shipping. who did not pay the purchase price even
though he registered him as the new owner.
S.11: The qualification of a Malaysian ship: S.61&65: Guilty for hoisting Malaysian The seller managed to sell the vessel to a 3P
- Malaysian citizen flag when not a registered Malaysian who successfully sought a court declaration
ship. that he was the rightful owner.
- Corporations which satisfy following
requirements: S.62: Concealing ship to be of - 2-fold of ship registration:
Malaysian registration is guilty of an
- Incorporated in Malaysia offence. 1. Public Law
- Principal Office in Malaysia S.58A: Terminable certificate of Deals with administrative and regulatory
registry for small ships. matters
- Management mainly carried out in
Malaysia S.12: Obligations to register the ship Reasons for registration under Public law:
- Majority share of the ship S.12(3): Consequences of not - Granting of nationality and the right to fly
registering ship the national flag.
- Any conditions set by the Minister
S.12(4): Not recognized as a - Right for naval and political protection
S.59(2): Only ship registered in Malaysia is
entitled to fly Malaysian national ensign. Malaysian ship
- Right of the flag state to utilizes the ship’s S.23 – Documents to be retained by - Made by Buyer
services in war situations Registrar
- Inspection when vessel is dry docked
2. Private Law S.24 – Port of registry
Classification Society
Specifically touches on proprietary interests. Sale of Ships
- Functions as “Puspakom” of the ships.
Functions: A ship is a chattel and it is also
- Produces license of fitness.
considered as part of goods.
- Providing prima facie evidence of the title
- Normally appointed by a Seller.
and ownership S.4 SOGA - A contract of sale of goods
is a contract whereby the seller MORNING WATCH
- Protecting the title and the ownership
transfers or agrees to transfer the F:- A ship known as the ‘Morning Watch’
property in goods to the buyer for a had been issued a class certificate by D,
- Preservation of priorities between price. There may be a contract of sale Lloyds Register of Shipping, despite the fact
individuals holding security interests over between one part-owner and that it had a variety of defects which
the ship, such as mortgages. another. rendered it unseaworthy.
Formalities for Registering the Ship 2nd Hand Ship Procedure - The ship was purchased by P in reliance on
S.16 – Application for the registration of -Formation of contract: the class certificate. Upon discovering the
Malaysian ship problems with the vessel, Buyer sought to
1. Negotiation Stage
recover his losses from Lloyd’s Register,
S.17 – Survey and measurement of ship
When deposit to be paid – 10% in arguing that it was foreseeable and
S.18 – Marking of ships security reasonable that he had relied on the class
S.19 – Rules as to name of Malaysian ships certificate.
Fundamental term = condition
S.20 – Entry of particulars in Register Book I: Whether Lloyd’s Register owed any duty
Breach = forfeiture of deposit
of care to a subsequent purchaser of a ship
S.21 – Evidence on first registry THE RANGER for which it issued a certificate, to make
S.22 – Certificate of registry 2. Inspection Stage sure that the certificate reflected the true
state of the ship.
H: Court determined that no r/s of proximity - Parties should aim to reach IV. choice of flag and flag state requirements
sufficient to form the basis of a duty of care agreement on each of the main
Contract Price
in negligence existed between Lloyd’s and a commercial issues before formal
3P purchaser such as C. contractual documentation is - most commercial arrangements the price
prepared (possibly by the Buyer and agreed will be fixed & the Builder will bear
- Court appeared to be heavily influenced by
Builder entering into a non-binding the risk of any increased costs of
consideration of the public purpose of the
form of letter of intent). construction.
Lloyd’s register, noting that “the primary
purpose of the classification system is…to - Standard Form are AWES and SAJ - Builder may seek provision for the price to
enhance the safety of life and property at be varied in certain circumstances, which
SAJ = Shipbuilders’ Association of
sea, rather than to protect the economic might include:
interests of those involved…in shipping”. Changes to take account of variation in the
AWES = Association of European
- To impose liability in negligence on Lloyd’s cost of core construction materials.
Shipbuilders and Ship Repairers
would undermine their ability to perform Changes to take account of variations to
this important function. Specification
exchange rates. This may particularly be the
NICHALAUS - Address spares and equipment to be case for European or Far Eastern yards
provided with the ship. which quote prices in US Dollars but whose
- Cannot have 2 conflicting views
expenses are likely to be incurred in local
- In addition to technical issues, other
3. Conclusion Stage currency.
matters that are likely to affect the
- Passing of risk when property is passed. specification are as follows: NORTH SHIPPING CO LTD v HYUNDAI
SEATH & CO v MOORE I. intended use of the ship (i.e.
commercial or non-commercial) F:- A letter of guarantee was jointly and
H: The risk of loss might pass before delivery,
severally provided by three Greek
but the ownership would not pass until II. trading patterns.
individuals to the Korean shipbuilders to
delivery was made.
III. classification required and guarantee payment by a Liberian
Shipbuilding Contracts Classification Society appointed. ship-owner for the construction of a ship.
- The letter stated that the guarantors installment as it was a liability arising has advantages for both parties as it means
would “irrevocably guarantee the payment before the rescission. that:
in accordance with the terms of the
- Hence, the guarantors remained - Buyer will not be required to prove its loss
shipbuilding contract all sums due or
liable to pay the second installment in order to claim the liquidated damages
become due by the ship-owner to the
under the guarantee for the referred to; and
ship-owners’ default in payment that
- the Builder will not be liable for unlimited
- Under the terms of the shipbuilding installment.
losses which it will not be able to quantify or
contract, the shipbuilders could cancel the
Payment insure against.
contract, retain money already paid and to
claim for damages in the event of a default - In most cases the first installment of Risk & Title
in the payment of the second installment. the purchase price will be payable
Title to the completed ship should obviously
before construction starts.
- There was such a default & the pass to Buyer upon completion and
shipbuilders cancelled the contract in - Subsequent installments will then payment of the delivery installment.
accordance with the shipbuilding contract. become due following completion of
particular stages of construction with
- On appeal to the HOL, the guarantors LTD
a final installment due on delivery.
contended that the effect of the Bearing in mind the hybrid nature of a
cancellation of the contract by the - Shipbuilding contract will, almost
shipbuilding contract, even if the ship is
shipbuilders destroyed their rights to without exception, include a
uncompleted, the property in it (but not the
recover under the second installment liquidated damages provision setting
materials which have not been appropriated
payment and replaced it with a remedy in out the agreed damages payable to
to her) may, in some circumstances, pass to
damages. the Buyer as a result of any delay in
the buyer, if the parties have clearly
delivery of the ship or as a result of its
- HOL was not persuaded and held that the stipulated it in the contract.
failure to comply with certain aspects
notice of cancellation of the contract by the Ship’s Class
of the specification.
shipbuilders did not affect the ship-owner’s
liability for payment of the second - The inclusion of such a clause is - A Classification Society acceptable to the
generally to be recommended and Buyer should be utilised and the exact class
notation required should be clearly set out - The relevant charter contained the that the vessel to be delivered would be in
as part of the specification. following clause: “. . . to be built by substance the vessel described in the
Osaka Shipbuilding Co. Ltd. and charters.”
- Builder normally covers the costs of the
known as Hull no. 354 until named
Classification Society during construction. COA upheld the decision.
and shall have a deadweight of about
Remedies of Builder 87,600 tons.” Remedies of Buyer
If the buyer cannot fulfil the payment, the - The vessel was actually constructed 1. Seek SP (S.57 SOGA)
builder may: in another yard at Oshima and not in BEHNKE v BEDE SHIPPING CO, LTD
- exercise his possessory lien Osaka as the shipbuilders could not
handle vessels above 45,000 tonnes. F:- It was a sale of a very old ship, but
- resell as a result, exercising his lien The Oshima yard was 50% owned by refitted with new boilers and an engine to
the Osaka shipbuilders. comply with German regulations. The sale
- exercise a common law right of stoppage
was confirmed with a telegraphic
in transit - The vessel Diana Prosperity was due acceptance by the sellers’ brokers. The
- sue for the price to be delivered on Apr. 1, 1976, but sellers tried to sell the vessel to other
the P Co refused to accept delivery on interested parties, but their revocation
Refusal to accept delivery will entitle the
the ground that the vessel they had came after acceptance. The seller refused to
shipbuilders to claim for the usual damages
chartered had been built by a provide instructions regarding the payment
& retention of all the progress payments
different co. of deposit and repudiated the contract with
and deposit under the shipbuilding contract.
H: Mocatta J decided that the plaintiff the buyer.
company and the tanker owners were - German buyers brought an action against
F:- A Japanese tanker company planned to not entitled to refuse delivery. the sellers, seeking a court declaration that
build 50 tankers of 80,000 tons each, to be there was a binding contract & a Court
Lord Denning: “… the description
delivered from 1975, & to obtain financing order for SP of the contract.
"built by the Osaka CO. Hull No. 354"
for the construction, it granted time charter
could not be regarded as a strict H:- The contract was enforceable and Court
for the first vessel to the D Co. The vessel
condition precedent which was to be ordered a SP.
was sub-chartered to the P Co.
exactly fulfilled and it was sufficient
2. Sue for Non-Delivery - A BOL that the shipping carrier has - The modes of transportation can be
to sign off on saying that when the anything from freight boat to air.
packages were loaded they were in
VI. Claused BOL
Bill of Lading - A legal doc b/w the shipper of good condition.
goods & the carrier detailing the type, - Issued if cargo is damaged/ there are
- If the packages are damaged or the
quantity and destination of the goods being missing quantities
cargo is marred in some way they will
need issue a Foul BOL Is BOL a negotiable instrument?
- Serves as a receipt of shipment when the
III. Ocean BOL -It possesses some of the characteristics of
goods are delivered at the predetermined
negotiable instrument.
destination. - allows the shipper to transport the
cargo overseas, nationally or - It is a DOT & it can be transferred by
internationally. endorsement & delivery.
I. Receipt
IV. Through BOL - But it is not a true negotiable instrument
II. Evidence of contract of carriage because:
- Allows for the shipping carrier to
III. DOT pass the cargo through several 1. It is not included in the definition of the
different modes of transportation term negotiable instrument as given in the
Types of Bill of Lading
and/or several different distribution Negotiable Instruments Act.
I. Straight BOL centers. 2. The transferee of a BOL gets only the
- Typically used when shipping to a - This BOL needs to include an Inland rights of the transferor of the instrument. If
customer BOL and/or an Ocean BOL depending the title of the transferor is defective, the
- For shipping items that have already been on its final destination. transferee gets a defective title.
paid for V. Combined Transport BOL In the case of a negotiable instrument a
II. Clean BOL BFPV without notice of defect, becomes a
- Involves a minimum of two different
holder in due course and gets a good title in
modes of transport, land or ocean.
cases where the title of the transferor is
Malaysian Contract of Carriage of Goods by and carefully load, handle, stow, carry, - Where loss/damage/delay in delivery has
Sea Act 1950 keep, care for and discharge the occurred from causes from which the
goods carried. carrier/his servant/agent is not entitled to
Definition & Characteristics of COGSA
discharge from liability, together with
3. Without unreasonable deviation
- A contract of carriage of goods by sea is a another cause, the carrier shall be liable
contract under which the carrier, against The carrier shall carry the goods to only to the extent that the
payment of freight, undertakes to carry by the port of discharge on the agreed or loss,damage/delay in delivery is attributable
sea the goods contracted for shipment by customary or geographically direct to the causes from which the carrier is not
the shipper from one port to another. route. entitled to dicharge from liability
The parties to the contract Any deviation in saving or attempting - However, the carrier shall bear the
to save life/property at sea or any
Charter Party - Ship-owner, Charterer burden of proof with respect to the
reasonable deviation shall not be
BOL - Carrier, Shipper loss,damage/delay in delivery resulting from
deemed to be an act deviating from
the other cause.
Responsibilities of Carrier the provisions of the preceding
paragraph. Basic Rights of Carrier
1. To provide a ship & make it seaworthy.
4. To reasonable dispatch 1. The right of claims for freight, dead
Art 3(1)HR - The carrier shall, before and at freight, demurrage & other charges.
the beginning of the voyage, exercise due Delay in delivery occurs when the
diligence to make the ship seaworthy, goods have not been delivered at the - Advance freight/Freight prepaid
properly man, equip and supply the ship and designated port of discharge within
- Freight to collect/Freight payable at
to make the holds, refrigerating and cool the time expressly agreed upon.
chambers and all other parts of the ship in 5. Liability to compensate damage
2. Lien on cargo
which goods are carried, fit and safe for
During the period the carrier is in
their reception, carriage and preservation. If the freight, contribution in general
charge of the goods, the carrier shall
average, demurrage to be paid to the carrier
2. Responsibility to cargo be liable for the loss of or damage to
and other necessary charges paid by the
Art 3(2)HR - The carrier shall properly the goods, except as otherwise
carrier on behalf of the owner of the goods
provided for in this Section.
as well as other charges to be paid to the 7. Saving or attempting to save life or inadequacy of packing or inaccuracies in the
carrier have not been paid in full, nor has property at sea above mentioned info.
appropriate security been given, the carrier
8. Act of the shipper, owner of the 2. Obligation to export goods in time for the
may have a lien, to a reasonable extent, on
goods or their agents formalities required.
the goods.
9. Nature or inherent vice of the - Shipper shall be liable for any damage to
3. Immunities
the interest of the carrier resulting from the
Art 4(2) HR - The carrier shall not be liable
10. Inadequacy of packing or
for the loss of or damage to the goods inadequacy or inaccuracy or delay in
insufficiency or illegibility of marks
occurred during the period of carrier’s delivery of such docs.
responsibility arising or resulting from any of 11. Latent defect of the ship not
3. The obligation to pay the freight and
the following causes: discoverable by due diligence
other charges
1. Fault of the Master, crew members, pilot 12. Any other causes arising without
- The shipper shall pay the freight to the
or servant of the carrier in the the fault of the carrier/his
carrier as agreed.
navigation/management of the ship. servant/agent.
- Shipper & Carrier may reach an agreement
2. Fire, unless caused by the actual fault of Basic Responsibilities of Shipper
that the freight shall be paid by the
the carrier. 1. Obligation to provide the agreed consignee. However, such an agreement
3. Force majeure and perils, dangers and and properly packaged goods. shall be noted in the transport docs.
accidents of the sea or other navigable - Shipper shall have the goods Cancellation of the Contract of Carriage of
waters. properly packed & shall guarantee the Goods by Sea
4. War or armed conflict. accuracy of the description, mark,
1. Either the carrier or the shipper may
number of packages or pieces, weight
5. Act of the government or competent request the cancellation of the contract and
or quantity of the goods at the time of
authorities, quarantine restrictions or neither shall be liable to the other if, due to
shipment and Shall indemnity the
seizure under legal process force majeure or other causes not
carrier against any loss resulting from
attributable to the fault of the carrier or the
6. Strikes, stoppages or restraint of labour
shipper, the contract could not be
performed prior to the ship's sailing from its
port of loading.
2. If the freight has already been paid, it
shall be refunded to the shipper & if the
goods have already been loaded on board,
the loading/discharge expenses shall be
borne by the shipper.
3. If BOL has been already issued it shall be
returned by shipper to carrier.
4. If due to force majeure/any other cause
not attributable to the fault of carrier or
shipper the ship could not discharge its
goods at the port of destination as provided
for in the contract of carriage, unless the
contract provides otherwise, the Master
shall be entitled to discharge the goods at
the safe port/place near the port of
destination and the contract of carriage
shall be deemed to have been fulfilled.
5. In deciding the discharge of the goods the
Master shall inform the shipper or the
consignee into consideration.