Bills Of Lading: Special Provisions - - CA Commercial Law

Section § 7301

This law is about handling bills of lading, which are documents issued when goods are shipped. If there's a mistake in the bill about the date or description of goods, and someone relies on that information, they can get damages from the issuer unless the bill says the issuer isn't sure about the details. If the issuer loads goods, they must check exactly what is being shipped, unless it's stated the shipper described them. Shippers must ensure their descriptions are accurate and compensate the issuer for any errors, but this doesn't affect the issuer's responsibilities to others. Also, if the shipper loads the goods and the bill states this fact, the issuer isn't liable for loading errors, but not stating this doesn't mean the issuer is at fault.

(a) A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to which a negotiable bill has been duly negotiated, relying upon the description of the goods in the bill or upon the date shown in the bill, may recover from the issuer damages caused by the misdating of the bill or the nonreceipt or misdescription of the goods, except to the extent that the bill indicates that the issuer does not know whether any part or all of the goods in fact were received or conform to the description, such as in a case in which the description is in terms of marks or labels or kind, quantity, or condition or the receipt or description is qualified by “contents or condition of contents of packages unknown,” “said to contain,” “shipper’s weight, load, and count,” or words of similar import, if that indication is true.

(b) If goods are loaded by the issuer of a bill of lading:

(1) the issuer shall count the packages of goods if shipped in packages and ascertain the kind and quantity if shipped in bulk; and

(2) words such as “shipper’s weight, load, and count,” or words of similar import indicating that the description was made by the shipper are ineffective except as to goods concealed in packages.

(c) If bulk goods are loaded by a shipper that makes available to the issuer of a bill of lading adequate facilities for weighing those goods, the issuer shall ascertain the kind and quantity within a reasonable time after receiving the shipper’s request in a record to do so. In that case, “shipper’s weight” or words of similar import are ineffective.

(d) The issuer of a bill of lading, by including in the bill the words “shipper’s weight, load, and count,” or words of similar import, may indicate that the goods were loaded by the shipper, and, if that statement is true, the issuer is not liable for damages caused by the improper loading. However, omission of such words does not imply liability for damages caused by improper loading.

(e) A shipper guarantees to an issuer the accuracy at the time of shipment of the description, marks, labels, number, kind, quantity, condition, and weight, as furnished by the shipper, and the shipper shall indemnify the issuer against damage caused by inaccuracies in those particulars. This right of indemnity does not limit the issuer’s responsibility or liability under the contract of carriage to any person other than the shipper.

bills of lading consignee nonnegotiable bill negotiable bill damages misdating misdescription goods issuer shipper's weight count indemnify bulk goods contract of carriage loading responsibility

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7302

This section explains who is responsible if something goes wrong with the transportation of goods under a bill of lading, which is a document used in shipping. If an issuer uses another person or a carrier to help transport the goods, the issuer is still on the hook for any problems unless there's an agreement otherwise. If an agent receives the goods, they're responsible for their time with the goods but not for issues caused by others. The issuer can go back to the performing carrier to get compensation if they have to pay for those issues.

(a) The issuer of a through bill of lading, or other document of title embodying an undertaking to be performed in part by a person acting as its agent or by a performing carrier, is liable to any person entitled to recover on the bill or other document for any breach by the other person or the performing carrier of its obligation under the bill or other document. However, to the extent that the bill or other document covers an undertaking to be performed overseas or in territory not contiguous to the continental United States or an undertaking including matters other than transportation, this liability for breach by the other person or the performing carrier may be varied by agreement of the parties.

(b) If goods covered by a through bill of lading or other document of title embodying an undertaking to be performed in part by a person other than the issuer are received by that person, the person is subject, with respect to its own performance while the goods are in its possession, to the obligation of the issuer. The person’s obligation is discharged by delivery of the goods to another person pursuant to the bill or other document and does not include liability for breach by any other person or by the issuer.

(c) The issuer of a through bill of lading or other document of title described in subdivision (a) is entitled to recover from the performing carrier, or other person in possession of the goods when the breach of the obligation under the bill or other document occurred:

(1) the amount it may be required to pay to any person entitled to recover on the bill or other document for the breach, as may be evidenced by any receipt, judgment, or transcript of judgment; and

(2) the amount of any expense reasonably incurred by the issuer in defending any action commenced by any person entitled to recover on the bill or other document for the breach.

bill of lading transportation of goods issuer liability performing carrier breach of obligation agent responsibility recovery of costs agent obligations possession of goods overseas transport agreements continental United States defense expenses shipping document through bill of lading carrier obligations

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7303

This law explains how and under what conditions a carrier can deliver goods to a different person or place than what's stated in the shipping document, called a bill of lading. Generally, the carrier can follow instructions from the person holding certain rights on the bill, like the holder, consignor, or consignee, depending on if the bill is negotiable or non-negotiable. If the instructions are not included in a negotiable bill, the person receiving the bill can rely on its original terms.

(a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from:

(1) the holder of a negotiable bill;

(2) the consignor on a nonnegotiable bill, even if the consignee has given contrary instructions;

(3) the consignee on a nonnegotiable bill in the absence of contrary instructions from the consignor, if the goods have arrived at the billed destination or if the consignee is in possession of the tangible bill or in control of the electronic bill; or

(4) the consignee on a nonnegotiable bill, if the consignee is entitled as against the consignor to dispose of the goods.

(b) Unless instructions described in subdivision (a) are included in a negotiable bill of lading, a person to which the bill is duly negotiated may hold the bailee according to the original terms.

bill of lading carrier delivery instructions misdelivery negotiable bill nonnegotiable bill consignor instructions consignee rights billed destination delivery without liability goods disposal tangible bill electronic bill bailee responsibility original terms

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7304

This law is about the rules for issuing tangible bills of lading, which are documents that detail the shipment of goods. Generally, you can't issue such a document in multiple parts unless it's international transportation. If you do issue a set of parts, each must have an identification code, and they'll only be valid if the goods haven't been delivered on any other part. If parts of a bill end up with different people, the first one who properly negotiates the part gets the rights to the goods. Someone who transfers just one part of a multi-part bill is still responsible to holders as if they transferred the whole set. Lastly, the person responsible for holding the goods, called the bailee, must give out the goods following a certain order laid out in other parts of the law, and once they deliver them against the first submitted part, they're off the hook for the whole document.

(a) Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The issuer is liable for damages caused by violation of this subdivision.

(b) If a tangible bill of lading is lawfully issued in a set of parts, each of which contains an identification code and is expressed to be valid only if the goods have not been delivered against any other part, the whole of the parts constitutes one bill.

(c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and different parts are negotiated to different persons, the title of the holder to which the first due negotiation is made prevails as to both the document of title and the goods even if any later holder may have received the goods from the carrier in good faith and discharged the carrier’s obligation by surrendering its part.

(d) A person that negotiates or transfers a single part of a tangible bill of lading issued in a set is liable to holders of that part as if it were the whole set.

(e) The bailee shall deliver in accordance with Chapter 4 (commencing with Section 7401) against the first presented part of a tangible bill of lading lawfully issued in a set. Delivery in this manner discharges the bailee’s obligation on the whole bill.

tangible bill of lading international transportation identification code goods delivery negotiable bill document of title part set first due negotiation bailee delivery carrier obligation damages liability transfer responsibility multi-part bill holder rights validity of parts

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7305

This law allows a carrier, at the request of the shipper (the consignor), to issue or procure a bill of lading—a document detailing the shipment of goods—at a different location than where the goods are shipped from, such as the shipment's destination or another specified place. Additionally, if someone who has the right to control the goods during shipping asks for it and surrenders any existing bill of lading, a substitute bill can be issued at another requested location, in accordance with another relevant section.

(a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor, may procure the bill to be issued at destination or at any other place designated in the request.

(b) Upon request of any person entitled as against a carrier to control the goods while in transit and on surrender of possession or control of any outstanding bill of lading or other receipt covering the goods, the issuer, subject to Section 7105, may procure a substitute bill to be issued at any place designated in the request.

bill of lading carrier consignor shipment location goods in transit substitute bill destinations shipment request control of goods transportation document consignor request outstanding bill

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7306

If someone changes or fills in a blank spot on a bill of lading without authorization, the bill will still be valid based on what it originally said before the change.

An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill enforceable according to its original tenor.

unauthorized alteration bill of lading original tenor enforceable blank filled in shipping document contract modification cargo transportation document validity legal enforceability altered documents shipping contracts document integrity

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7307

This law explains that when a carrier, like a shipping company, holds goods under a bill of lading for transport or storage, they have a right, called a lien, to keep the goods until they are paid for charges like storage, transportation, or necessary expenses. This lien is enforceable against the person who shipped the goods, known as the consignor, or anyone with a claim to the goods unless the carrier knew the consignor couldn't authorize these charges. If the carrier delivers the goods without being paid or unjustifiably refuses to deliver them, they lose this right. However, if someone buys the bill of lading and has paid for it, the carrier's lien is limited to what charges are listed in the bill or tariffs, or a reasonable charge if none are listed.

(a) A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for charges after the date of the carrier’s receipt of the goods for storage or transportation, including demurrage and terminal charges, and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law. However, against a purchaser for value of a negotiable bill of lading, a carrier’s lien is limited to charges stated in the bill or the applicable tariffs or, if no charges are stated, a reasonable charge.

(b) A lien for charges and expenses under subdivision (a) on goods that the carrier was required by law to receive for transportation is effective against the consignor or any person entitled to the goods unless the carrier had notice that the consignor lacked authority to subject the goods to those charges and expenses. Any other lien under subdivision (a) is effective against the consignor and any person that permitted the bailor to have control or possession of the goods unless the carrier had notice that the bailor lacked authority.

carrier lien bill of lading negotiable bill demurrage charges terminal charges storage charges preservation expenses consignor purchaser for value applicable tariffs reasonable charge voluntary delivery unjustifiable refusal lien effectiveness authority to charge

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7308

This law talks about how a carrier—someone who transports goods—can enforce what's called a lien on goods if they're owed money. Essentially, if someone owes the carrier, the carrier has the right to sell the goods, either publicly or privately, as long as it's done in a commercially reasonable way. Before selling, the carrier must notify everyone who might have an interest in the goods. If anyone wants to keep the goods, they can pay off the debt before the sale. Also, if the goods are sold, whoever buys them in good faith won't have to worry about previous claims on the goods, even if the carrier didn't completely follow the rules. After the sale, any leftover money, after the debt is settled, should be held for someone who has a right to it. Finally, the carrier has to be careful to follow the rules; otherwise, they might have to pay for damages.

(a) A carrier’s lien on goods may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods. The notification must include a statement of the amount due, the nature of the proposed sale, and the time and place of any public sale. The fact that a better price could have been obtained by a sale at a different time or in a method different from that selected by the carrier is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. The carrier sells goods in a commercially reasonable manner if the carrier sells the goods in the usual manner in any recognized market therefor, sells at the price current in that market at the time of the sale, or otherwise sells in conformity with commercially reasonable practices among dealers in the type of goods sold. A sale of more goods than apparently necessary to be offered to ensure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

(b) Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred in complying with this section. In that event, the goods may not be sold but must be retained by the carrier, subject to the terms of the bill of lading and this division.

(d) A purchaser in good faith of goods sold to enforce a carrier’s lien takes the goods free of any rights of persons against which the lien was valid, despite the carrier’s noncompliance with this section.

(e) A carrier may satisfy its lien from the proceeds of any sale pursuant to this section but shall hold the balance, if any, for delivery on demand to any person to which the carrier would have been bound to deliver the goods.

(f) The rights provided by this section are in addition to all other rights allowed by law to a creditor against a debtor.

(g) A carrier’s lien may be enforced pursuant to either subdivision (a) or the procedure set forth in subdivision (b) of Section 7210.

(h) A carrier is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.

carrier lien public sale private sale commercially reasonable notification requirements purchase in good faith bill of lading debtor rights damages liability conversion carrier obligations goods retention proceeds distribution enforcement options willful violation

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7309

If a company issues a bill of lading for shipping goods, it must take the same care that a careful person would with those goods. This rule doesn't change other laws that hold carriers responsible for damage. Shipping companies can limit how much they owe for lost or damaged goods if the bill shows a value limit and the shipper had a chance to declare a higher value. However, this limit doesn't apply if the carrier wrongly takes the goods for itself. Bills of lading can also include rules about how and when to make claims or start legal actions related to the shipment.

(a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise the degree of care in relation to the goods which a reasonably careful person would exercise under similar circumstances. This subdivision does not affect any statute, regulation, or rule of law that imposes liability upon a common carrier for damages not caused by its negligence.

(b) Damages may be limited by a term in the bill of lading or in a transportation agreement that the carrier’s liability may not exceed a value stated in the bill or transportation agreement if the carrier’s rates are dependent upon value and the consignor is afforded an opportunity to declare a higher value and the consignor is advised of the opportunity. However, such a limitation is not effective with respect to the carrier’s liability for conversion to its own use.

(c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the shipment may be included in a bill of lading or a transportation agreement.

bill of lading carrier liability negotiable bill nonnegotiable bill reasonable care consignor declaration transportation agreement claim presentation action commencement damages limitation conversion liability value-dependent rates opportunity to declare value goods shipping care claim time provisions

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)