LW3310 LW3311 Commercial Law

LW3310 (LW3311) Commercial Law
LEICESTER LAW SCHOOL
LW3310 (LW3311) COMMERCIAL LAW 2017-18
Semester Two Handout
Teaching Team:
Assoc. Professor Ben Adodo (Module Convenor) <ben.adodo@le.ac.uk>
Dr Horace Yeung < horace.yeung@le.ac.uk>
Mark Leiser < mark.leiser@leiecester.ac.uk>
This Handout is also available on Blackboard

accessed via http://www2.le.ac.uk/students
Page 1 of 68
SCHEDULE OF LECTURES
Teaching Lecture no. & date Lecture Topic

Week
26 1 International Sale of goods: The Big Picture
19 Jan 2018
27 2 23 Jan Documentary Sales: CIF Contracts (part 1)
28 5 2 Feb Documentary Sales: FOB Terms (Part 1)
30 8 13 Feb Carriage of Goods by Sea: Introduction (Part 1)
30 9 16 Feb Carriage of Goods by Sea (Part 2)
32 12 27 Feb Carriage of Goods by Sea: Concluded
32 13 2 Mar Payment method: Documentary Credit (Part 1)
34 16 13 Mar Revision Class (Part 1)
34 17 16 Mar Revision Class (Part 2)
Page 2 of 68
SCHEDULE OF TUTORIALS
Tutorial Cycle Week Main topic covered
1 29 CIF Contracts
1 30 CIF Contracts
2 31 FOB
2 32 FOB
3 33 Carriage of Goods
3 34 Carriage of Goods
4 35 Revision & LC
4 36 Revision & LC
Semester 2 (extracted from a 23 Mar 2017 email to Kath)

First Lecture: Week 26 (Fri, 19 Jan 2018)
Last lecture: Week 34 (Fri, 16 Mar 2018)
Tutorial Cycle 1: Weeks 29 & 30
Page 3 of 68
LECTURE 1: INTERNATIONAL SALES OF GOODS TRANSACTIONS –

THE BIG PICTURE
1 GENERAL READING
 E Baskind, G Osborne and L Roach, Commercial Law (Oxford University

Press Oxford, 2013) ch 19
2 FURTHER READING
 E McKendrick, Goode on Commercial Law (4th edn Penguin, London 2010)

pp 941-949
 J Adams and H MacQueen, Atiyah’s Sale of Goods (12th edn Pearson, 2010)
ch 22
3 THE CONTEXT OF “INTERNATIONAL TRADE” IN COMMERCIAL LAW

- When is a sale of goods contract an international sales transaction?
- Problems inherent in international sales
o Is the buyer credit worthy?
o The need for export/import licences
o Possibility of application of foreign law
o Enforcement of judgment or arbitral award in foreign country
(consider The Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, known as the New York Convention)
o Political/social instability in foreign country?
o Fluctuation in exchange rates
- How would you describe an “international commercial lawyer”?
- Commercial law is all about supporting the business of trade.
Clive M Schmitthoff, Commercial Law in a Changing Economic Climate, 2nd edition,

London 1981, 15:
‘[An international commercial lawyer] ... cannot only be a man learned in law. His
antennae must be turned to receive financial and monetary information; he must under-
stand the fluctuation in the world markets whether they deal in commodities, securities,
shipping, insurance or other goods and services; he must take account of the tax
position, both national and international; he must appraise the political risk and the
perceptive of the shift in social power - In brief, in addition to being a man of law, he
must be an homme d’affaires.’
Q: Business is central to commercial law – and what is central to business?
Page 4 of 68
A: It’s all about profit... FOLLOW THE MONEY!
Page 5 of 68
Some Key concepts In international trade law
1. Party autonomy (freedom of contract doctrine) and

2. Basic assumptions when interpreting a commercial contract
On ‘commercial sense’, see e.g. Goode on Commercial Law, 8-11; R Goff,

‘Commercial contracts and the Commercial Courts’ [1984] LMCLQ 382, 388.
4 SOURCES OF INTERNATIONAL TRADE LAW

Because of the strength of party autonomy, sources of law in the field of trade are
weighed differently than other areas of law. Party autonomy is extremely important
in trade law, so the main source of commercial law is the Contract of Sale.
After party autonomy, the most important source of law is the applicable law of the
sales contract (that is, what substantive sales law applies eg English law, French law,
Spanish law …?). As we are focussing on English law, the sources of law are:
A. Contract
- Express terms
- Implied terms
B. Case law
C. Statutes: national and regional

-Legislation
-Statutory instruments such as regulations
-Mandatory laws
D. International conventions
E. Codified commercial practices
5 HARMONISATION IN INTERNATIONAL COMMERCIAL LAW

The approximation of an “international commercial law” is a goal envisioned by many,
and trade law stands at the epicentre of many such visions. Commercial Law is the
prime target of harmonisation/unification of law, largely because:
 commerce by its nature transcends national boundaries – international business

dictates a need for predictability;
 basic desires of business people are similar worldwide[?]
 Globalisation is linked to fee world economy, commerce is major part of this;
 principles of commerce less culture-specific than many other fields of law (such as
family law)
Page 6 of 68
5.1 AGENTS OF HARMONISED COMMERCIAL LAW:

5.1.1 European Union;
 The Principles of European Contract Law (PESL), 1998
 The most recent initiative, the proposal for a Common European Sales
Law (CESL), 2011.
5.1.2 International Chamber of Commerce
 Uniform Customs and Practice for Documentary Credits (UCP 600)
 INCOTERMS (THE International Rules for the Interpretation of Trade
Terms promulgated by the International Chamber of Commerce) 2010 (in
force 1 January 2011) - see
http://www.iccwbo.org/Incoterms/index.html?id=40772 for details of the
key changes to the previous version in 2000.
5.1.3 United Nations Commission on Uniform Trade Law (UNCITRAL)
 United Nations Convention on Contracts for the International Sale of Goods
(Vienna Convention 1980), frequently referred to as the CISG
 Whilst the CISG has been ratified by 80 states representing approximately
¾ of world trade, it has not (yet) been ratified in the UK.
5.1.4 International Institute for the Unification of Private Law (Unidroit)
 UNIDROIT Principles of International Commercial Contracts, 1994.
5.1.5 World Trade Organisation (WTO)
 http://www.wto.org/
5.1.6 Hague Conference on Private International Law
 Hague Convention on the Carriage of Goods by Sea 1921.
Page 7 of 68
6 THE INTERNATIONAL SALES MATRIX: A MULTIPLICITY OF
CONTRACTS
DO NOT UNDERESTIMATE THIS POINT:

Multiplicity means that these contracts are fundamentally inter-related!
 Transport document must do the following (achieved by a valid bill of lading):
1. Give control of the goods to carrier and third party

2. Constitute a receipt for identified goods by party undertaking responsibility for
their carriage
3. Establish the apparent condition of the goods when received by the carrier
4. Show that the goods are in movement and not static
5. Establish privity of contract between holders of the document and the carrier.
7 A TYPICAL EXPORT TRANSACTION

1. The purchase order
 Buyer places order for goods.
 This is contract of sale, all other contracts must conform with it
 Usually standard term contract
 Choice of law clause included, if not then conflicts of law rules apply
2. Payment
 Usually in advance
3. Procurement of goods
Page 8 of 68
 Seller must make/supply goods.

 SGA 1979 will apply.
4. Export license
 Seller usually obtains export license.
5. Transportation arrangements generally
 Fob/cif look at responsibilities of the seller (see later lectures)
6. Packaging marketing and dispatch
 Seller must do this
7. Seller must prepare bill of lading showing details of goods/shipper/consignee
and forward bill of lading to shipping company.
8. Loading/customs clearance seller’s obligation.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
LECTURES 2 - 7: DOCUMENTARY SALES AND TRADE TERMS – CIF

AND FOB CONTRACTS
8 GENERAL READING
 E Baskind, G Osborne, L Roach, Commercial Law (Oxford University Press,

Oxford) ch 19 and 20
9 FURTHER READING

ch 32
 J Adams and H MacQueen, Atiyah’s Sale of Goods (12th edn Pearson, London
2010) ch 22
 L S Sealy and R J Hooley, Commercial Law: Text, Cases and Materials (4th
edn Oxford University Press, Oxford 2008) 489-493
 I Carr, International Trade Law (4th edn Routledge, London 2010) 5-7
10 DOCUMENTARY SALES AND TRADE TERMS

10.1 DEFINITION OF A DOCUMENTARY SALE
‘… [T]he seller agrees to dispatch goods rather than deliver them at their intended
destination and to procure for the benefit of the buyer the contract of carriage and
any other ancillary contracts that may be agreed, e.g. of marine insurance, and
make over to the buyer the contract documents or other documents embodying
the essential terms. Documentary sales involve as a minimum the transfer to the
buyer of documents of control over the goods - typically a bill of lading or a
warehouse warrant - to enable the buyer to sell or pledge the goods while they
are still in transit or in independent warehouse’. (Goode on Commercial Law,
223-24)
Page 9 of 68
10.2 THE TWO KEY OBLIGATIONS

(1) Delivery of Goods; and
(2) Delivery of Documents
10.3 IMPORTANCE OF THE DOCUMENTS

LS Sealy and RJA Hooley, Commercial Law – Text, Cases and Materials, (4th edn,
Oxford University Press, Oxford, 2009) 490:
Because of the time which it takes for goods to travel by sea, it is also
particularly necessary in this type of transaction for the parties to be able to
make arrangements to finance the deal and for this purpose to give security
over the goods to their respective banks. To meet these problems, the
documents relating to the sale and carriage of the goods have been elevated to
a position of special symbolic importance, to the point where for many
purposes they are treated in law as representing the goods themselves: for
instance, ‘delivery’ of the goods can be effected by handing over these
documents.
10.4 THE SHIPPING DOCUMENTS TO BE TRANSFERRED IN A

DOCUMENTARY SALE
10.4.1 The bill of lading
 A document which is issued by the carrier (i.e. the owner or charterer of the
ship) to the consignor of the goods (or to someone nominated by him) shortly
after the goods have been loaded.
 The bill of lading is a document with a threefold purpose:
o 1. Receipt – it acknowledges the fact that the goods have been received
and evidences the fact that they have been loaded in apparent good
order and condition (if not then the defect is noted e.g. some items
were damaged – if this is done the bill is ‘claused’)
o 2. Carriage contract – contains the terms of the contract of carriage,
identifying the route and destination.
o 3. Evidence of title – Bill of lading regarded in law as evidencing the
rights of possession and ownership in respect of the goods, so that
these rights are deemed (at least prima facie) to be vested in the holder
of the bill of lading – the person who is in possession of the bill of
lading. See later when we consider the contract of carriage.
 See COGSA 1992 s2:
 (1) Subject to the following provisions of this section, a
person who becomes (a) the lawful holder of a bill of
lading, […] shall (by virtue of becoming the holder of
the bill...) have transferred to and vested in him all
rights of suit under the contract of carriage as if he had
been a party to that contract.
Page 10 of 68
10.4.2 The commercial invoice
 The invoice which details the goods being sold and describing then in a way
which makes it possible to identify them.
10.4.3 The policy of marine insurance
 The policy must make clear that it covers the goods specified in the above
documents for the whole of the journey covered by the bill of lading (i.e. the
agreed route).
 When the bill of lading is transferred from one person to another, the policy of
insurance will be assigned at the same time.
10.5 ENGLISH TRADE TERMS
 English common law has developed standard trade terms such as (but not
limited to) ex-works contracts, FOB, CIF and ex-ship contracts.
 By comparison, INCOTERMS 2010 are harmonised trade terms published by
ICC, and only apply if the contract expressly stipulates them (and the
relevant version, eg 2000, 2010).
 Apart from CIF and FOB contracts which we consider below, parties may use,
for example, ex-works contract.
o EX Works (named place)
 If this term is included then the overseas buyer or agent must
collect the contract goods at the place where the seller’s
works/factory/warehouse or store are situated.
 The buyer must arrange collection of the goods by land to go to
port/airport or railway so that the goods go to country of
destination. Therefore need carriage contract. The buyer will
also need to arrange insurance to cover any risks to goods.
o Typical obligations of the parties:
 (1) Seller
o Supply goods which are been measured and packed
o Supply the invoice and other documents regarding goods
o Deliver goods to buyer by placing then at buyer’s
disposal/collection
o Pay any costs to placing goods at buyer’s disposal
o Provide any assistance to buyer if requested in respect of
obtaining documents for export of goods/insurance
 (2) Buyer
o Must accept the goods and pay for them
o Obtain appropriate licences/authorisations for export
o Pay any costs associated with export of goods including
pre-shipment/inspection etc.
Page 11 of 68
CIF (Cost, Insurance, Freight) Contracts
10.6 GENERAL READING

Oxford) chs 19, 20
10.7 FURTHER READING

chs 32, 34
2010) ch 22
 I Carr, International Trade Law (4th edn Routledge, London 2010) ch 1
 G H Trietel, ‘Rights of rejection under c.i.f. sales’ [1984] LMCLQ 565
 G H Treitel, ‘Damages for breach of a c.i.f. contract’ [1988] LMCLQ 457
11 NATURE OF CIF SALE CONTRACT
 This trade term designates a port of arrival.

o *The Julia [1949] AC 293, 309-13 (Lord Porter)
o *Arnold Karberg and Co v Blythe, Green Jourdain and Co [1915] 2
KB 379, 388:
 It is not a contract that goods shall arrive, but a contract to ship
goods complying with the contract of sale, to obtain, unless the
contract otherwise provides, the ordinary contract of carriage to
the place of destination, and the ordinary contract of insurance
on that voyage, and to tender these documents against payment
of the contract price.
11.1 DUTIES OF THE SELLER UNDER A CIF CONTRACT
 Biddell Bros v Clement Horst [1911] 1 KB 214, 220 (Hamilton J):

o [T]he meaning of a contract of sale upon cost, freight and insurance
terms is so well settled that it is unnecessary to refer to authorities
upon the subject. A seller under a contract of sale containing such
terms has firstly to ship at the port of shipment goods of the description
contained in the contract; secondly, to procure a contract of
affreightment, under which the goods will be delivered at the
destination contemplated by the contract; thirdly to arrange for an
insurance upon the terms current in the trade which will be available
for the benefit of the buyer; fourthly to make out an invoice...; and
finally to tender these documents to the buyer...
 See also Lord Atkinson’s analysis of the duties of a C.I.F. seller in Johnson v
Taylor Bros & Co Ltd [1920] AC 144, 155-59.
Page 12 of 68
11.1.1 To ship the right goods on time from the right port on the right
vessel
11.1.1.1 The goods must be shipped, and must be shipped on time

 Hindley & Co v East India Produce [1973] 2 Lloyd’s Rep 515
 *Bowes v Shand [1877] AC 455 (HL)
o Contractual stipulation as to time of shipment is part of the description
of the goods – now SOGA s. 13
11.1.1.2 They must be the right goods

 SOGA s. 13 (N.B. Mash & Murrell v Joseph Emmanuel [1961] 1 All ER 485
(reversed on facts [1962] 1 All ER 77)
11.1.1.3 They must be shipped from the right port

 Bowes v Shand, above
11.1.1.4 They must be shipped on the right vessel:

 Bowes v Shand, above
11.1.2 Duty to procure a contract of affreightment (carriage) under which

the goods will be delivered to the right destination
11.1.2.1 Making the contract of carriage
11.1.2.2 Terms of the contract of carriage

 Tsakiroglou v Noblee Thorl [1962] AC 93
11.1.2.3 The right destination

 Colins & Shields v Weddel [1952] 2 All ER 337
11.1.3 To arrange for insurance upon the terms current in the trade
 Groom v Barber [1915] 1 KB 316
11.1.4 The duty to make out an invoice
 Johnson v Taylor Bros & Co Ltd [1920] AC 144
11.1.5 Duty to tender conforming documents
11.1.5.1 Qualities required by the documents

 Bill of lading/insurance policy must be valid and effective at time of tender:
o Arnhold Karberg v Blythe [1915] 2 KB 388
o Theodor Schneider v Burgett & Newsam [1915] 2 KB 388
11.1.5.2 Documents must be tendered in time:

 Toepfer v Lenesan-Poortman [1980] 1 Lloyd’s Rep 143 (CA)
Page 13 of 68
11.2 BUYER’S DUTY UNDER A CIF CONTRACT

11.2.1 To pay the price against tender of shipping documents
 SOGA s. 28: delivery of goods and payment usually concurrent conditions
o Biddell Bros v Clement Horst, above (in particular the judgment of
Kennedy LJ in CA):
 delivery of documents equivalent to delivery of goods
 SOGA s. 32(1): not applicable to CIF contracts:
o Where, in pursuance of a contract of sale, the seller is authorised or
required to send the goods to the buyer, delivery of the goods to a
carrier...for the purpose of transmission to the buyer is prima facie
deemed to be a delivery of the goods to the buyer.
11.3 THE BUYER’S RIGHTS OF REJECTION
 *Gill & Duffus v Berger [1984] AC 382 (HL) (in particular, the judgment of
Lord Diplock at 394-396)
 *Kwei Tek Chao v British Traders & Shippers [1954] 2 QB 459: complex
case. See Goode on Commercial Law, 958-959 for explanation.
 *Panchaud Freres SA v Establissements General Grain [1970] 1 Lloyd’s Rep
53 (CA)
11.3.1 Loss of goods before tender of documents:
 *Manbre Saccharine v Corn Products [1919] 1 KB 198
o Conforming documents had to be paid against, although goods
destroyed
11.4 PASSING OF THE PROPERTY IN THE GOODS UNDER A CIF

SALE
11.4.1 Presumption
 Property passes with the documents, but only if there is payment against
documents
o * The Miramichi [1914] P 71
o Smyth v Bailey [1940] 3 All ER 60 (HL), in particular the judgment of
Lord Wright: CIF seller typically reserves right of disposal until
payment: SOGA s. 19(1)
o *The Albazero [1977] AC 774
o Ginzberg v Barrow Haematite Steel [1966] 1 Lloyd’s Rep 343
11.4.2 Passing of property in parts of a bulk:
 SOGA ss. 16, 20A and 20B
 Law Commission, Sale of Goods Forming Part of a Bulk (1993) Law Com
Rep No 215
 *The Elafi [1981] 2 Lloyd’s Rep 679: SOGA s. 18 r. 5(3)
11.4.3 Unascertained goods
 SOGA s. 16
Page 14 of 68
o Notices of appropriation needed with ascertainment.
11.5 TRANSFER OF RISK IN A CIF SALE
 Retroactive, over the ships rail, upon taking up of documents.

 See Manbre Saccharine v Corn Products [1919] 1 KB 198
11.6 TRANSFER OF INSURANCE CONTRACT FROM SELLER TO

BUYER
 Marine Insurance Act 1906 s. 50:

o (1) A marine policy is assignable unless it contains terms expressly
prohibiting assignment. It may be assigned either before or after loss.
o (2) Where a marine policy has been assigned so as to pass the
beneficial interest in such policy, the assignee of the policy is entitled
to sue thereon in his own name; and the defendant is entitled to make
any defence arising out of the contract which he would have been
entitled to make if the action had been brought in the name of the
person by or on behalf of whom the policy was effected.
o (3) A marine policy may be assigned by indorsement thereon or in
other customary manner.”
11.7 TRANSFER OF CONTRACTUAL RIGHTS UNDER CARRIAGE

CONTRACT FROM SELLER TO BUYER
 Carriage of Goods by Sea Act 1992 s. 2:

o (1) Subject to the following provisions of this section, a person who
becomes
 (a) the lawful holder of a bill of lading,
 (b)....
 (c)....
o shall (by virtue of becoming the holder of the bill...) have transferred to
and vested in him all rights of suit under the contract of carriage as if
he had been a party to that contract.”
FOB (Free on Board) Contracts
11.8 GENERAL READING:

Oxford) chs 19, 20

chs 32, 34
Page 15 of 68
2010) ch 22
 B Reynolds, ‘Stowing, trimming and their effects on delivery, risk and
property in sales “f.o.b.s.”, “f.o.b.t.” and “f.o.b.s.t.” [1994] LMCLQ 119
12 DEFINITION
 Trade term is – typically – a term for designation of a port of shipment.

 NOTE various classifications of FOB clauses:
o strict/classic FOB (normal)
o FOB with additional services (more than normal)
o Simple FOB (less than normal)
13 DUTIES OF SELLER
13.1 SELLER’S DUTY TO PLACE GOODS ON BOARD SHIP
 *Pyrene v Scindia Navigation [1954] 2 QB 402 (Devlin J), approved in The El

Amria and The El Minia [1982] 2 Lloyd’s Rep 28
14 DUTIES OF BUYER
14.1 BUYER’S DUTY TO ARRANGE CONTRACT OF CARRIAGE
 *Pyrene v Scindia Navigation [1954] 2 QB 402
14.2 BUYER’S DUTY TO ARRANGE CONTRACT OF INSURANCE

14.3 BUYER’S DUTY TO NOMINATE VESSEL, PORT OF SHIPMENT,
LOADING DATE
 Compagnie v W. Seymour Plant Sales and Hire Ltd [1981] 2 Lloyd’s Rep 466
 Cumming v Hasell (1920) 28 CLR 508
 Colley v Overseas Exporters [1921] All ER 596
 Boyd v Luis Louca [1973] 1 Lloyd’s Rep 209
 J and J Cunningham v Munro [1922] 28 Com Cas 42
 *Bunge v Tradax [1981] 1 WLR 711 (HL)
 Gill & Duffus SA v Societe pour l’Exportation des Sucres SA [1985] 1 Lloyd’s
Rep 621
 ERG v Chevron USA Inc [2007] EWCA Civ 494
 Agricultores Federatos Argentinos v Ampro [1965] 2 Lloyd’s Rep 157
 Costal (Bermuda) Petroleum Ltd v VTT Vulcan Petroleum SA (The Marine
Star) [1993] 1 Lloyd’s Rep 329
 The Osterbeck, Olearia Tirrena SpA v NV Algermeene [1972] 2 Lloyd’s Rep
341
Page 16 of 68
14.4 BUYER’S DUTY TO PAY
 SOGA s. 28 (payment and delivery are concurrent conditions)

 SOGA s. 32(1) (delivery of goods to carrier prima facie deemed to be
delivery of goods to buyer)
15 PASSING OF PROPERTY AND RISK
 *Pyrene v Scindia Navigation [1954] 2 QB 402

o Over the ships rail = end of loading period.
15.1 CONTRACTS FOR SALE OF UNASCERTAINED GOODS:
 SOGA s. 18 r. 5(2):
o Where ... the seller delivers the goods to ... a carrier ..., and does not
reserve the right of disposal, he is to be taken to have unconditionally
appropriated the goods to the contract.
 *Federspiel v Twigg [1957] 1 Lloyd’s Rep 240
 *Inglis v Stock (1885) 10 App Cas 263 (HL): on the passing of property point,
see now SOGA s. 18 r. 5(4)
Page 17 of 68
Lectures 8 - 12: Contract for the Carriage of Goods by Sea
16 NOTE ON READING:
Cases of particular importance are asterisked (*). Cases that must be read are double
asterisked (**). Remember: a large number of the materials cited are examples (with
the cases) or references for further reading (journal articles; texts).
It cannot be emphasised enough that you must also read the relevant statutory
materials (e.g. the Hague-Visby Rules, and the Carriage of Goods by Sea Acts 1971
and 1992).
16.1 GENERAL READING:

Oxford) ch 21
16.2 FURTHER READING:

chs 32, 36
 J Wilson, Carriage of Goods By Sea (7th edn Pearson Longman, Harlow
2010) Chapters 1 – 4
 M G Bridge (gen ed), Benjamin’s Sale of Goods (8th edn Sweet & Maxwell,
London 2010) (available via Westlaw)
17 INTRODUCTION AND CONTEXT
Goode on Commercial Law, 943:
The international sales transaction, with its central contract of sale and
ancillary arrangements for insurance, storage, transportation and finance,
epitomizes the commercial operation. It is in the international sale that the
importance of documents as a means of harmonizing the security interests of
seller and buyer becomes most evidence; it is here that the ingenuity of
financier and businessperson in developing instruments that will answer
commercial needs reaches its highest point. The international sale is thus for
the lawyer, as well as for the businessperson, a fascinating area of study, and
one of which we can, necessarily only give a brief glimpse....
Page 18 of 68
17.1 TOPICS
 The nature and role of carriage of goods (by sea) in international sales
transactions
 The nature, role, and functions of the bill of lading
o The bill of lading and the passing of property
o The qualities of a bill of lading
o Rights and obligations pertaining to bills of lading
 Carriers’ rights and obligations – The Hague-Visby Rules
17.2 THE METHODS OF INTERNATIONAL SALES
 If Trotter’s Independent Traders, based in London, want to sell goods to The

Barksdale Corporation, based in Baltimore, how can they go about it?
o Transport the goods
o How does one go about this process?
Goode on Commercial Law, 952 et seq (describing a ‘typical export transaction’):
(1) The purchase order

(2) Assurance of payment
(3) Procurement of the goods
(4) Export licence
(5) Arranging transport
(6) Booking cargo space
(7) Packaging, marking and dispatch
(8) Preparation of the bill of lading
(9) Pre-shipment inspection
(10) Loading
(11) Customs
(12) Arrival and unloading
Page 19 of 68
17.3 TERMINOLOGY
So far various technical terms have been used. Getting used to such terminology is
essential to success in commercial law generally, and international sales law in
particular. What follows is a brief glossary of various terms that will be used in these
lectures.
Carrier
 Contracted with to transport goods, sometimes also the ship owner, BUT can
have chartered the ship for purposes of carriage or leased it for same.
Carriage Period
 Period of time where the goods are considered under carriage, and subject to
the Hague-Visby Rules.
 Defined as beginning at the end of the loading period, and terminates at the
start of the unloading period.
Charter
 To rent a vessel/ship.
o Some (large) carriage contracts charter a whole vessel.
o You can also have a partial charter (of part of the space on the ship).
o You can also have a time charter or a voyage charter.
 A useful, if rather crude, shorthand is to think of charter parties
as a taxi, compared to the bus of normal shipping.
 There is a distinction between charter party bills of lading and “regular” bills
of lading – the focus here will be on regular bills of lading.
Consignee
 The person (including legal persons) to whom the bill of lading is originally
made out in favour of. This is usually the original buyer, but sometimes the
seller himself (if he plans to sell afloat or retain title until payment made in
full).
 The consignee has a right to indorse the bill of lading to another “buyer” of the
goods – this other buyer will then become the indorsee.
 When in possession/control of the bill of lading, the consignee will be a
‘holder’ – this concept is discussed further below.
Indemnity
 A form of guarantee under which one party guarantees to compensate another
party if a claim is made by a third party.
 Two forms
o Statutory (following the Hague-Visby Rules)
o Non-statutory (problems of illegality)
Indorsee
 The person (including legal persons) to whom the original consignee or
another indorsee has transferred the bill of lading.
 When in possession/control of the bill of lading, the indorsee will be a ‘holder’
– this concept is discussed further below.
Page 20 of 68
Loading Period
 The complete period of time during which all the goods are loaded onto the
vessel
o See * Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 QB 402
o Ends when ALL goods are loaded.
Shipper
 Normally the legal person loading the goods on board the ship and/or making
out the bill of lading for carrier to approve. This will almost always be the
original seller.
 In CIF the shipper is also be the person contracting with the carrier for the
carriage of goods.
 In FOB cases, the shipper sometimes is the person contracting with the carrier,
but not always.
Ship owner
 Legal owner of the vessel.
Stevedore
 Dock worker, normally involved with loading/unloading.
17.4 ELEMENTS OF INTERNATIONAL BUSINESS LAW
 Carriage of Goods
o Different Types of Contracts
17.5 IMPACT OF CHANGES IN COMMERCIAL PRACTICE
 Multi-modal contracts
 Containerisation – ‘The Box that Changed Britain’
 The all-stage contract remains a contract of dispatch, and not of arrival.
o Dispatch – seller ships goods from own country or delivers them to
carrier after which seller bears no further responsibility.
o Arrival contract – seller obliged to deliver goods to agreed place and is
responsible for goods up to that point.
 Insufficiency of Bills of Lading
 Electronic Innovation
17.5.1 Continuing Practice
 Continuity of the documentary sale
17.6 PROBLEMS OF INTERNATIONAL SALES
Page 21 of 68
18 DETERMINING LIABILITY
18.1 SOURCES OF LAW
 Contract of sale
o Will include all relevant terms, especially trade terms (forming a
‘contractual dictionary’ – Goode on Commercial Law, 944).
 Will state the governing law
o If not, conflicts of laws will determine appropriate forum
18.2 CONFLICTS
 Ship Owners versus Cargo Owners

18.2.1 Freedom of Contract
 19th Century
o P S Atiyah, Rise and Fall of Freedom of Contract (Clarendon Press,
Oxford 1979)
 19th-20th Century
o Harter Act 1893 (USA)
18.2.2 International Conferences and Legislative Developments
 Hague Rules
o Carriage of Goods by Sea Act 1924
 Hague-Visby Rules
o Carriage of Goods by Sea Act 1971
 Hamburg Rules
 Rotterdam Rules
 Problems of lack of uniformity
Page 22 of 68
THE BILL OF LADING
19 GENERAL READING
 E McKendrick, Goode on Commercial Law (Penguin, London 2010) 979 et

seq
19.1 SEE ALSO
 J Wilson, Carriage of Goods by Sea (7th edn Pearson Longman, Harlow 2010)
Chapters 5 – 9
London 2010) (available via Westlaw) Chapter 18, section 2(a)
 I Carr, International Trade Law (4th edn Routledge-Cavendish, London 2010)
Chapter 6
 C Pejovic, ‘Documents of title in carriage of goods by sea: present status and

possible future directions’ (2001) JBL 461
 P Todd, ‘Case Comment: Bills of lading as documents of title’ (2005) JBL 762
– looks at The Rafealla S, a very important case
 T Schmitz, ‘The bill of lading as a document of title’ (2011) 10 Journal of
International Trade Law & Policy 255
 N Gaskell, ‘Bills of lading in an electronic age’ (2010) LMCLQ 233
20 THE NEED FOR APPROPRIATE DOCUMENTATION
 Goode on Commercial Law, 979: the documents tendered to the buyer must
enable him
o (a) to procure delivery from the carrier;
o (b) to assert rights against the carrier if the goods have been lost or
damaged in transit through breach of the carrier’s obligations;
o (c) where the contract is a c.i.f. contract or a variant of it, to recover
from an insurer for loss of or damage to the goods in transit so far as
resulting from perils normally covered by marine insurances;
o (d) to calculate the freight;
o (e) to clear the goods through the customs in the country of import.
Page 23 of 68
21 THE BILL OF LADING
 NB – A common shorthand for a bill of lading is ‘B/L’

 A Bill of Lading: a document issued by carrier, e.g. a ship’s master or by a
company’s shipping department, acknowledging that specified goods have
been received on board as cargo for conveyance to a named place for delivery
to the consignee who is usually identified.
 Why the focus on bills of lading?
 What about other transport documents (noted below in 24 Similar
Documents)?
21.1 THE ISSUANCE OF A BILL OF LADING
 For the general practice of issuing a bill of lading, see eg * Heskell v

Continental Express Ltd [1950] 1 All ER 1033
 Hague-Visby Rules, Article III rule 3
o Shipper entitled to demand issue of a bill of lading, but the carrier can
refuse to issue bill if reasonable grounds for believing information
supplied is inaccurate or if there is no reasonable means to check the
accuracy of the information.
 See further e.g. The Esmeralda [1988] 1 Lloyd’s Rep 206
 The Mata K [1998] 2 Lloyd’s Rep 614
 On the impact of electronic documentation and communication on bills of
lading, see generally articles above.
21.2 THE CHARACTERISTICS OF A BILL OF LADING
 It is a document of title
 It is a receipt by the carrier
 It evidences the apparent condition of the goods
 It evidences the terms of the contract of carriage
 It can operate to transfer the contractual rights it embodies
21.2.1 The Bill of Lading as a Document of Title
 Lickbarrow v Mason (1794) 5 TR 683; 100 ER 35

 Barclays Bank Ltd v Customs and Excise Commissioners [1963] 1 Lloyd’s
Rep 81, 88 (Diplock LJ):
o The decision in Lickbarrow v Mason allowed for the sale or pledge of
goods whilst they were at sea, and thus ‘laid the foundation for the
financing of overseas trade and the growth of commodity markets in
the 19th century’.
 See also Factors Act 1889 s1(4)
 * The Delfini [1990] 1 Lloyd’s Rep 252, 268 (Mustill LJ)
Page 24 of 68
21.2.1.1 Transfer of constructive possession
 This will only happen if (a) the goods to which the bill relates are identifiable;
(b) the bill is transferable; and (c) the bill is properly transferred.
21.2.1.2 Transfer of ownership
 Bills of Lading Act 1855 s1 – mere delivery of the document, without any
necessary indorsement, suffice to transfer ownership of the goods
 Sale of Goods Act 1979 s17 – property passes when the parties intend for it to
pass. Therefore if goods are agreed to be sold under a contract of sale, and the
agreement is that the property is transferred following delivery of the bill of
lading, property passes by virtue of the contract of sale rather than the
(essentially) subsidiary bill.
 Sanders v Maclean (1882-83) LR 11 QBD 327 (CA) 341 (Bowen LJ)
(emphasis added):
o The law as to the indorsement of bills of lading is as clear as in my
opinion the practice of all European merchants is thoroughly
understood. A cargo at sea while in the hands of the carrier is
necessarily incapable of physical delivery. During this period of
transit and voyage, the bill of lading by the law merchant is universally
recognised as its symbol, and the indorsement and delivery of the bill
of lading operates as a symbolical delivery of the cargo. Property in
the goods passes by such indorsement and delivery of the bill of lading,
whenever it is the intention of the parties that the property should pass,
just as under similar circumstances the property would pass by an
actual delivery of the goods. And for the purpose of passing such
property in the goods and completing the title of the indorsee to full
possession thereof, the bill of lading, until complete delivery of the
cargo has been made on shore to some one rightfully claiming under it,
remains in force as a symbol, and carries with it not only the full
ownership of the goods, but also all rights created by the contract of
carriage between the shipper and the shipowner. It is a key which in
the hands of a rightful owner is intended to unlock the door of the
warehouse, floating or fixed, in which the goods may chance to be.
 The Kronprinsessa Margerta [1921] 1 AC 486
21.2.1.2.1 The transfer of limited ownership rights

 Bills of Lading Act 1855 s1:
o Every consignee of goods named in a bill of lading, and every
endorsee of a bill of lading, to whom the property in the goods therein
mentioned shall pass upon or by reason of such consignment or
endorsement, shall have transferred to and vested in him all rights of
suit, and be subject to the same liabilities in respect of such goods as if
the contract contained in the bill of lading had been made with himself.
 Pledges
 Buyers in Part of a Bulk
 Sewell v Burdick (1884) 10 App Cas 74
 The Delfini [1990] 1 Lloyd’s Rep 252 (CA)
Page 25 of 68
 The problems with the old law led to legislative intervention: The Carriage of
Goods by Sea Act 1992. This is discussed below at 21.2.5 The Bill of Lading
as a Transferable Contract.
21.2.1.3 A ‘spent’ bill of lading
 ** Barber v Meyerstein (1870) LR 4 HL 317 – holding that where the carrier

has a lien over goods, and they are held in a warehouse to the carrier’s order,
the carrier is in possession of said goods
21.2.1.4 Negotiability
 *Kum v Wah Tat Bank [1971] 1 Lloyd’s Rep 439, 446 (Lord Devlin):
o it is well settled that “Negotiable” when used in relation to a bill of
lading means simply transferable. A negotiable bill of lading is not
negotiable in the strict sense; it cannot, as can be done by the
negotiation of a negotiable instrument, give to the transferee a better
title than the transferor has got.
21.2.1.5 Ordinary Bills versus Straight Bills

 An ordinary bill of lading will be transferable by delivery from one holder to
another. This is will be where the bill is transferable to the consignee or to his
order.
 A straight bill of lading may only be transferred once, by delivery to the
named consignee only (the words ‘to his order’ will be absent).
 ** The ‘Rafaela S’ [2003] 2 Lloyd’s Rep 113
21.2.2 The Bill of Lading as a Receipt
 On arrival at port, the carrier must deliver up the goods to the holder of the bill
of lading.
 Hague-Visby Rules Article III rule 3
o The shipper is entitled to demand the carrier issue a bill of lading
showing
 (a) the leading marks necessary to identify the goods
 (b) either the number of packages or pieces, or the quantity, or
weight of goods loaded, and
 (c) the apparent order and condition of the goods on loading
o ‘no carrier … shall be bound to state or show in the bill of lading any
marks, number, quantity, or weight which he has reasonable ground for
suspecting not accurately to represent the goods actually received, or
which he has no reasonable means of checking.’
 Hague-Visby Rules Article III rule 4
o An indorsed bill of lading ‘shall be prima facie evidence of the receipt
by the carrier of the goods as therein described … However, proof to
the contrary shall not be admissible when the bill of lading has been
transferred to a third party acting in good faith.’
21.2.2.1 Leading Marks

 *Parsons v New Zealand Shipping Co [1901] 1 KB 548
 ** Cox v Bruce (1886) 18 QB 147
Page 26 of 68
 See also Re Reinhold & Co (1896) 12 TLR 422
21.2.2.2 Quantity of Goods Loaded

 *Grant v Norway (1851) 10 CB 665
 The Nea Tyhi [1982] 1 Lloyd’s Rep 606 – noting the difficulty of reconciling
the rule in Grant v Norway with the basic principle that a principal is liable for
the fraud of his agent.
 Bills of Lading Act 1855 s3 – this attempted to eradicate the problem caused
by Grant v Norway, but only succeeding in stating (inter alia) that where the
ship’s master has signed the bill, the bill is only conclusive against the master,
and not the carrier.
 Carriage of Goods by Sea Act 1992 s4 – repealed s3 of the 1855 Act, and set
out that whether the bill is signed by the master, or another with express or
implied authority from the carrier to sign, the bill will be conclusive evidence
against the carrier in favour of the holder in good faith.
o But the 1992 Act is limited to bills of lading as defined therein.
 Carriage of Goods by Sea Act 1992 s1 – excludes from the definition of ‘bill
of lading’ straight consigned bills, ie those bills made in favour of named
consignee which are not transferable.
 Rasnoimport v Guthrie [1966] 1 Lloyd’s Rep 1
 The carrier is only obliged to use one measure of quantity.
o The Mata K [1998] 2 Lloyd’s Rep 614
o The Atlas [1996] 1 Lloyd’s Rep 642
 As to the effect of a bill of lading with minimal definition (eg weight, number
and quantity unknown), see eg New Chinese Antimony Co Ltd v Ocean
Steamship Co Ltd [1917] 2 KB 664; The Galatia [1979] 2 All ER 726,
affirmed [1980] 1 All ER 501; River Guara (Cargo Owners) v Nigerian
National Shipping Line Ltd [1998] QB 610.
21.2.3 The Bill of Lading as Evidence of the Condition of the Goods

 This requirement looks at the appearance of the goods, not their quality.
 Where goods are loaded and there are no comments, the bill of lading is
considered ‘clean’.
 If the bill of lading contains information about the order and condition of the
goods, the bill is considered ‘claused’.
 * The Galatia [1979] 2 All ER 726, affirmed [1980] 1 All ER 501
 See further * The ‘David Agmashenebeli’ [2003] 1 Lloyd’s Rep 92 for the
duty of the master with regard to signing off on the condition of the goods
21.2.3.1 Estoppel
 Compania Naviera Vasconzada v Churchill and Sim [1906] 1 KB 237
 * Silver v Ocean Steamship Co Ltd [1930] 1 KB 416, 428 (Scurtton LJ):
‘the mercantile importance of clean bills is so important that the fact that he
[the consignee] took the bill of lading which is in fact clean, without object, is
quite sufficient evidence that he relied on it.’
 *Canadian and Dominion Sugar Co Ltd v Canadian National (West Indies)
Steamships [1947] AC 46, 54 (Lord Wright):
Page 27 of 68
o Where a bill of lading referred to a ship’s receipt which was to convey

the true condition of the goods on loading, such a qualification will
‘reasonably convey to any businessman that if the ship’s receipt was
not clear the statement in the bill of lading as to apparent order and
condition could not be taken as unqualified.’
21.2.3.2 Indemnity
 The shipper may try to get the carrier to issue a clean bill of lading, even
though the goods are damaged, in order to increase the marketability of the bill
of lading. He may do so by offering to indemnify the carrier against any
potential loss caused by the carrier being estopped from denying the true
nature of the goods. However, unless there is a genuine dispute over the
quality of the goods, this indemnity will be unenforceable, as it is basically a
contract to defraud any consignee:
o * Brown Jenkinson v Percy Dalton (London) Ltd [1957] 2 QB 621
 Hague-Visby Rules Article III rule 5:

o The shipper shall be deemed to have guaranteed to the carrier the
accuracy at the time of shipment of the marks, number, quantity and
weight, as furnished by him, and the shipper shall indemnify the carrier
against all loss, damages and expenses arising or resulting from
inaccuracies in such particulars. The right of the carrier to such
indemnity shall in no way limit his responsibility and liability under
the contract of carriage to any person other than the shipper.
 * Oricon Waren-Handelgesellschaft MbH v Intergraan NV [1967] 2 Lloyd’s
Rep 82
 Courts will often try to help the claimant adduce evidence from other sources:
o Att Gen of Ceylon v Scindia Steam Navigation Co [1962] AC 60; The
Atlas [1996] 1 Lloyd’s Rep 642
21.2.4 The Bill of Lading as Evidence of the Contract of Carriage

 The bill of lading will normally carry (on the reverse) the terms of the contract
of carriage, or a reference to standard terms (the ‘short bill of lading’).
 Olley v Marlborough Court Hotel Ltd [1949] 1 KB 532
21.2.4.1 Evidence for the shipper:

 Crooks & Co v Allan (1879-80) LR 5 QBD 38, 40-41 (Lush J)
o A bill of lading is not the contract, but only the evidence of the
contract; and it does not follow that a person who accepts the bill of
lading which the shipowner hands him, necessarily and without regard
to circumstances, binds himself to abide by all its stipulations. If a
shipper of goods is not aware when he ships them, or is not informed
in the course of the shipment that the bill of lading which will be
tendered to him will contain such a clause, he has a right to suppose
that his goods are received on the usual terms, and to require a bill of
lading which shall express those terms.
Page 28 of 68
21.2.4.2 Evidence for the charterer and consignee:

 Leduc v Ward (1888) LR 20 QBD 475 (CA) 479 (Lord Esher MR):
o It has been suggested that the bill of lading is merely in the nature of a
receipt for the goods, and that it contains no contract for anything but
the delivery of the goods at the place named therein. It is true that,
where there is a charterparty, as between the shipowner and the
charterer the bill of lading may be merely in the nature of a receipt for
the goods, because all the other terms of the contract of carriage
between them are contained in the charterparty; and the bill of lading is
merely given as between them to enable the charterer to deal with the
goods while in the course of transit; but, where the bill of lading is
indorsed over, as between the shipowner and the indorsee the bill of
lading must be considered to contain the contract, because the former
has given it for the purpose of enabling the charterer to pass it on as the
contract of carriage in respect of the goods.
 * Sewell v Burdick (1884) 10 App Cas 74, 105 (Lord Bramwell) – as between
the shipper and the carrier, the bill of lading is a receipt for the goods which
states the terms on which they were delivered to and received on board the
ship. It is excellent evidence of the contract of carriage, but it is not actually
the contract.
 * The Ardennes (Cargo Owners) v SS Ardennes [1951] 1 KB 55
21.2.5 The Bill of Lading as a Transferable Contract

 Carriage of Goods by Sea Act 1992 s2(1) – this allows for the transference of
the shippers rights and duties arising under the contract of carriage, when a bill
of lading is transferred to a ‘lawful holder’.
 The ‘lawful holder’ is defined in s5(2) – depends on whether or not such a
holder has become the holder of the bill in good faith.
 This is the key – the bill of lading is not conclusive evidence of property (this
is still ruled by the intention) so it is the right to step into the carriage contract
which is at the heart of the protection afforded by statute.
21.2.5.1 Three rights of the lawful holder

1. Holder controls the goods during the voyage, and
2. Holder has right of suit as if he were party to the carriage contract, and
3. Holder has right to the cargo on presentation of B/L at port of discharge.
22 THE SELLER’S DUTIES AS TO THE NATURE OF THE BILL OF LADING

The seller must make sure that the bill of lading:
 Is a shipped bill of lading (ie it must show the goods were received by the
carrier on board the vessel, and not just placed on the dock).
 Is a clean bill
 Is not issued under a charterparty (due to potential conflict with the duties
under that relationship) – see further S.I.A.T. Di Del Ferro v Tradax Overseas
SA [1978] 2 Lloyd’s Rep 470
Page 29 of 68
 Records the date and place of shipment, which complies with the contract of
sale – see further Hansson v Hamel & Horley Ltd [1922] 2 AC 36
 Covers the whole voyage, though transhipment (where there are multiple sea
voyages) is acceptable provided the bill covers the whole voyage
 Sufficiently identifies the goods
 Covers only the buyer’s goods and none other – see further Re Keighley
Maxted & Co and Bryan, Duran & Co (No 2) (1894) 70 LT 155
 Is signed on shipment or within a reasonable time
23 DELIVERY UP OF THE GOODS
 The carrier has a fundamental obligation to deliver up the goods (subject to

any lien) to the holder of the bill of lading. Failure to do so is a breach of
contract. However problems can arise.
23.1 DELIVERY WITHOUT A BILL OF LADING
 The Stettin (1988) 14 PD 142

 * Sze Hai Tong Bank v Rambler Cycle Co Ltd [1959] AC 576, 586 (Lord
Denning):
o It is perfectly clear law that a shipowner who delivers without
production of the bill of lading does so at his peril.
 * Kuwait Petroleum Corpn v I & D Oil Carriers Ltd, The Honda [1994] 2
Lloyd’s Rep 541
 * Motis Exports Ltd v Campskibsselskabet AF 1912 A/S [1999] 1 All ER
(Comm) 571
23.2 INDEMNITY
 *Sze Hai Tong Bank v Rambler Cycle Co Ltd [1959] AC 576
23.3 FRAUD
 *Glyn Mills Currie & Co v East and West India Dock Co (1882) 7 App Cas
591, 605 (Lord Blackburn):
o Commenting on the tradition of issuing three copies of the bill of
lading, his Lordship said: ‘I have never been able to learn why
merchant and shipowners continue the practice of making out bills of
lading in parts … I suspect [that] merchants dislike to depart from an
old custom for fear that the novelty may produce some unforeseen
effect.’
 * Motis Exports Ltd v Campskibsselskabet AF 1912 A/S [1999] 1 All ER
(Comm) 571, affirmed [2000] 1 All ER (Comm) 91
 See further: S Baughen, ‘Bailment or conversion? Misdelivery claims against
non-contractual carriers’ [2010] LMCLQ 411; P Todd, ‘The bill of lading and
delivery: the common law actions’ [2006] LMCLQ 539
Page 30 of 68
24 SIMILAR DOCUMENTS
 See e.g. Sir Anthony Lloyd, ‘The bill of lading: do we really need it?’ [1989]
LMCLQ 47
 Short bill of lading – same as a normal bill of lading, but considerably
simplified. In addition the reverse of the bill is blank (the normal bill of lading
has the contractual terms on the reverse) – this allows the insertion of terms
(usually reference to standard terms, like with railway tickets).
 Mate’s receipt – usually issued prior to the issuance of a bill of lading.
Provides prima facie evidence that the goods described are on board.
Generally they are not evidence of contractual terms, and are not documents of
title, though custom may be able to provide evidence of such roles.
 Delivery order – not a document of title at common law, not does it evidence a
contract of carriage not is it a receipt for the goods.
 Through and combined transport bills of lading – bills of lading with
provisions for multi-modal transportation. More context-dependent that
normal bills of lading, thus careful inspection is necessary.
 Non-negotiable sea waybills – a non-transferable document that need not be
presented to collect the goods. Can be evidence of the contract and receipt of
the goods, but they’re not documents of title neither can the contract of
carriage be transferred. Shipper has the right, it seems, to redirect the goods.
The value of these bills is that they allow for simple transportation where the
seller and buyer are in a trusting relationship.
Page 31 of 68
CARRIER’S RIGHTS AND DUTIES (THE HAGUE-VISBY RULES)
25 GENERAL READING
 E MacKendrick, Goode on Commercial Law (4th edn Penguin, London 2010)

ch 36
25.1 SEE ALSO
 J Wilson, Carriage of Goods by Sea (7th edn Pearson Longman, Harlow 2010)
Chapter 6
Chapter 8
 A Diamond, ‘The Hague-Visby Rules’ [1978] LMCLQ 225
 E Røsœg, ‘The applicability of Conventions for the carriage of goods and for
multimodal transport’ [2002] LMCLQ 316
 E Peel, ‘Actual Carriers and the Hague Rules’ (2004) 120 LQR 11
 F M B Reynolds, ‘The Package or Unit Limitation and the Visby Rules’
[2005] LMCLQ 1
 M Huybrechts, ‘Limitations of Liability and of Actions’ [2002] LMCLQ 370
26 INTRODUCTION
26.1 THE ROLE OF CONTRACT, TORT AND BAILMENT
26.2 THE BUILD-UP TO THE HAGUE-VISBY RULES
 Crooks & Co v Allan (1879-80) LR 5 QBD 38, 40 (Lush J):

o The long list of excepted perils and the much longer list of exemptions
and qualifications of which the clause in question is one, and which
seem designed to exonerate the shipowners from all liability as
carriers, and to reduce them substantially to the condition of
irresponsible bailees, are printed in type so minute, though clear, as not
only not to attract attention to any of the details, but to be only
readable by persons of good eyesight. The clause in question comes in
about the middle of thirty closely packed small type lines, without a
break sufficient to attract notice. If a shipowner wishes to introduce
into his bill of lading so novel a clause as one exempting him from
general average contribution—a clause which not only deprives the
shipper of an ancient and well understood right, but which might avoid
his policy and deprive him also of recourse to the underwriter, he
ought not only to make it clear in words, but also to make it
conspicuous by inserting it in such type and in such a part of the
document as that a person of ordinary capacity and care could not fail
to see it.
 Brussels Convention 1924
 Carriage of Goods by Sea Act 1924
 Visby Rules 1963
 Brussels Protocol 1968
Page 32 of 68
27 THE HAGUE-VISBY RULES
 Carriage of Goods by Sea Act 1971 (brought into force on 23 June 1977, by
the Carriage of Goods by Sea Act (Commencement Order) 1977)
 The Morviken (The Hollandia) [1983] 1 Lloyd’s Rep 1.
27.1 APPLICATION OF HAGUE-VISBY

27.1.1 Articles I and X of the Hague-Visby Rules
 Three main requirements:
o (1) The contract of carriage must be covered by a bill of lading or
similar document of title (Article I(b); Carriage of Goods by Sea Act
1971 s1(4))
 * Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 QB 402
 Parsons Corp v CV Scheepvaartonderneming [2002] EWCA
Civ 694
 ** The Rafaela S [2005] 2 AC 423
o (2) The bill of lading must relate to the carriage of goods between
ports in two different states – HVR Article X
o (3) The contract of carriage must either:
(i) have a specified connection with a contracting state, or
(ii) provide that the Rules or relevant legislation imposing the
Rules govern the contract
 The Komninos S [1991] 1 Lloyd’s Rep 370
27.1.2 Carriage of Goods by Sea Act 1971
 S1(3): If the port of shipment is in the UK then it is unnecessary that the
delivery port be in a contracting state.
 S1(6): The parties can give the Rules the force of law by incorporating them
into the contract (within or proven by the bill of lading), as well as by contract
evidence by or within a non-negotiable receipt eg a sea waybill provided that
in such cases the contract expressly states that the Rules will govern the
receipt as if the receipt were a bill of lading.
 S1(7): To the extent that the contract applies to deck cargo, the Rules will
apply to deck cargo
27.2 FORMATION OF THE CONTRACT
 *Leduc & Co v Ward (1888) 20 QBD 475

o Held: the bill of lading is conclusive as to the terms of the carriage as to
consignees or indorsees of the bill. But also, this means that any prior
contractual dealings not on the bill will not bind consignees or indorsees.
 Carriage of Goods by Sea Act 1992 s2(1) – the transfer of rights of suit ‘under
the contract of carriage’
 Carriage of Goods by Sea Act 1992 s5(1) – defines ‘contract of carriage’ in the
context of bills of lading as the contract contained or evidenced by the bill of
lading.
Page 33 of 68
27.3 CARRIERS DUTIES AND LIABILITIES UNDER THE CONTRACT
OF CARRIAGE
27.3.1 As to ship
 Hague-Visby Rules, Article III, Rule 1:
o Carrier is bound before and at the beginning of the voyage to exercise
due diligence to:
 Make the ship seaworthy
 Properly man and supply the ship
 Make all of the holds, containers and other places where goods
will be fit and safe for the reception and carriage and
preservation of the goods
 Hague-Visby Rules, Article IV, Rule 1:
o Carrier who exercises due diligence is not liable for loss or damage
caused to the cargo resulting from the unseaworthiness of the vessel
 Meaning of carrier: The Khian Zephyr [1982] 1 Lloyd’s Rep 73
 Meaning of seaworthiness: Maxine Footwear Co Ltd v
Canadian Government Merchant Marine [1959] AC 589; * The
Muncaster Castle [1961] AC 807; * The Kapitan Sakharov
[2002] 2 Lloyd’s Rep 255
27.3.2 As to cargo
o Carrier must properly and carefully load, handle, stow, carry, keep,
care for and discharge the goods carried.
o * The Jordan II [2004] UKHL 49, [2005] 1 All ER 175
o Royal Exchange Shipping Co v W J Dixon & Co (1886) 12 App Cas
11; Strang, Steel & Co v A Scott & Co (1889) 14 App Cas 601
 Hague-Visby Rules, Article I(c):
o ‘“Goods” includes goods, wares, merchandise, and articles or every
kind whatsoever except live animals and cargo which by the contract
of carriage is stated as being carried on deck and is so carried.’
o Svenska Traktor v Maritime Agencies [1953] 2 QB 295
 Hamburg Rules, Article 9 rule 1:
o Carrier can carry goods on the deck if agreed with the shipper, or due
to custom, or due to statutory regulation
27.3.3 As to issue and contents of the Bill of Lading
 Hague-Visby Rules, Article III, Rule 3(a), (b):
o After receiving the cargo the carrier or master or agent of the carrier is
required on the shipper’s demand to issue a bill of lading showing
 Leading marks
 Quantity
 Quality
 A provisio to this Rule states that the issuer does not have to
state such information where they have reasonable grounds for
suspecting that they are inaccurate or they have no reasonable
means of checking the facts.
Page 34 of 68
 Transocean Liners Reederei GmbH v Euxine Shipping Co Ltd (The Imvros)

[1999] 1 Lloyd’s Rep 848; Owners of cargo lately laden on board the David
Agmashenebeli v Owner of the David Agmashenebeli [2003] 1 Lloyd’s Rep
92; ** Sea Success Maritime Inc v African Maritime Carriers Ltd [2005]
EWHC 1542 (Comm); 2 Lloyd’s Rep 692
27.3.4 As to voyage
 Scaramange & Co v Stamp (1880) 5 CPD 295, 304-305 (Cockburn CJ)
o Deviation to save or attempt to save property is permitted, as is any
other reasonable deviation.
 Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony)
[2001] 1 AC 638
27.3.5 As to delivery of cargo at destination
 The Sormovskiy 3068 [1994] 2 Lloyd’s Rep 266
 The Houda [1994] 2 Lloyd’s Rep 541
27.3.6 Excepted perils
o Sets out a list of perils for which liability does not attach, such as act of
god, war, perils of the sea, strikes etc
o Also excludes liability for defects of the master or crew in the
navigation or management of the ship.
o As to liability for defects in navigation or management of the ship,
compare Gosse Millerd v Canadian Government Merchant Marine
[1929] AC 223 and Kalamazoo Paper Co v CPR Co [1950] 2 DLR 369
(Can Sup Ct).
o Fire: Lennards Carrying Co v Asiatic Petroleum [1915] AC 705
 Hague-Visby Rules, Article IV rule 4
o Carrier allowed to deviate the course to safe life and/or property, and
such deviation will not be a breach of the contract.
27.3.7 Limitation of liability
o General principle is that any purported exclusion or limitation of
liability imposed by the Hague-Visby Rules is null and void.
o Renton v Palmyra [1956] 1 QB 462 (clause allowing deviation where
necessary was not void)
 Hague-Visby Rules, Article VII:
o The general principle in Article III, Rule 8, does not apply where there
is loss or damage to the goods before loading or after discharge.
o The carrier cannot provide a lower limit of liability than that provided
by the Hague-Visby Rules, and he cannot contract out the Hague-
Visby Rules on this issue.
27.3.7.1 Nature of limitations

 Hague-Visby Rules, Article IV, Rule 5(a):
Page 35 of 68
o Unless the nature and value of the goods have been declared by the
shipper before shipment and inserted into the bill of lading, neither the
carrier not the ship shall in any event become liable for the loss or
damage of or to the goods exceeding the equivalent of 666.7 units of
account per package or unit, or 2 units of account per kilogramme of
gross weight of the goods lost or damaged, whichever is the higher.
 For the position under the un-amended Hague Rules, see eg River Gurara
(Owners of Cargo Lately Laden on Board) v Nigerian National Shipping Line
Ltd [1998] QB 610
 Hague-Visby Rules, Article IV, Rule 5(c):
o ‘Where a container, pallet or similar article of transport is used to
consolidate goods, the number of packages or units enumerated in the
bill of lading as packed in such article of transport shall be deemed the
number of packages or units for the purpose of this paragraph as far as
these packages or units are concerned. Except as aforesaid such article
of transport shall be considered the package or unit.’
 ** El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA [2004]
FCAFC 202, [2004] 2 Lloyd’s Rep 537 (Federal Court of Australia):
27.3.7.2 Persons entitled to invoke the limitation provisions

Carrier’s Servants
Carrier’s Agents
Independent Contractors
27.3.7.3 When the right to invoke the limitation provisions is lost

 Hague-Visby Rules, Article IV, Rule 5(e); Hamburg Rules, Article 8, Rule 1;
London Convention, Article 4:
o If it is proven that the damage resulted from the carrier’s act or
omission, done with intent to cause damage, or done recklessly, or with
knowledge that damage would probably occur, then the carrier loses
his right to limit.
27.4 SHIPPERS DUTIES AND LIABILITIES

27.4.1 As to cargo
 Casebourne v Avery & Houston (1887) 3 TLR 795
o See generally G Panagopoulos, ‘Damages for a Charterer’s Failure to
Load: An Anglo-Australian Perspective’ (1994) 25 Journal of
Maritime Law and Commerce 119
27.4.2 As to supply of information
o A shipper must indemnify the carrier against liability for all loss,
damages, and expenses arising from inaccuracies in the marks,
number, quantity and weight of the goods.
27.4.3 As to dangerous and deleterious cargo
 *Effort Shipping Ltd v Linden Management SA (The Giannis K) [1998] AC
605
Page 36 of 68
o In the absence of disclosure to the carrier, the shipper is liable for all
damages directly or indirectly arising from the shipment, and the
carrier has a right to land the goods, or destroy them, or render them
safe, if they are of an inflammable, explosive or dangerous nature to
the remainder of the cargo.
 The Fiona [1994] 2 Lloyd’s Rep 506
 Effort Shipping Co Ltd v Linden Management SA (The Giannis K) [1994] 2
Lloyd’s Rep 171
o (1) The shipper must undertake not to ship goods which are liable to
cause damage to the ship or other cargo without first seeking the
carrier’s consent; and (2) the shipper must undertake not to cause delay
to the vessel.
27.4.4 As to freight
 Freight is the cost charged by the carrier for transporting the goods
 Hunter v Prinsep (1808) 10 East 378 – prima facie a contract of carriage is an
entire contract – the carrier is only entitled to payment upon delivery of the
full cargo to the contracted destination.
 Asfar & Co v Blundell [1896] 1 QB 123
 The Aries [1977] 1 Lloyd’s Rep 334
 Colonial Bank v European Grain & Shipping Ltd (The Dominique) [1987] 1
Lloyd’s Rep 239
 Compania Naviera General SA v Kerametal Ltd (The Lorna) [1983] 1 Lloyd’s
Rep 373
o The contract may provide that freight is payable ‘ship and/or cargo lost
or not lost’, which provides the carrier with a measure of protection
from liability.
27.4.5 As to shipment of cargo
28 TRANSFER OF CONTRACTUAL RIGHTS AGAINST THE CARRIER
 Carriage of Goods by Sea Act 1992

o S2 – A person who becomes the lawful holder of a bill or lading or a is
person to whom delivery is to be made under a sea waybill or ship’s
delivery order has transferred to and vested in him all rights of suit
under the contract of carriage as if he had been a party to the contract
of carriage, and all rights that had existed in the shipper prior to
transfer are extinguished (though nb this is not quite the case with sea
waybills).
o On the effect of this see * East West Corp v DKBS AF 1912 A/S [2003]
QB 1509, where Mance LJ suggested that only contractual rights (not
proprietary rights) are transferred, but he did not rule on the matter.
He further discussed the issue in * Scottish and Newcastle
International Ltd v Othon Ghalanos Ltd [2008] UKHL 11 [46].
28.1 CARRIER’S RIGHTS AGAINST TRANSFEREES
 Brandt v Liverpool, Brazil and River Plate Steam Navigation Co Ltd [1924] 1
KB 575; Swan v Barber (1879) 5 Ex D 130; Sanders v Vanzeller (1843) 4 QB
260. But cf The Aramis [1989] 1 Lloyd’s Rep 213.
Page 37 of 68
 Carriage of Goods by Sea Act 1992 s3(1) – the transferee will incur liabilities
if he had been party to a contract of carriage where he (a) takes or demands
delivery from the carrier of any of the goods to which the relevant document
relates, or (b) makes a claim under the contract of carriage against the carrier
in respect of any of those goods, or (c) is a person who, at a time before those
rights were vested in him, took or demanded delivery from the carrier of any
of those goods.
 ** Borealis AB v Stargas Ltd (The Berge Sisar) [2002] 2 AC 205
28.2 CLAIMS AGAINST THE CARRIER

28.2.1 Tort
 *The Aliakmon [1986] AC 785 – in order to sue in negligence the party must
have either the ownership of the goods, the possession of the goods, or
(probably) the entitlement to possession of the goods.
 For conversion, an immediate right to possession is what is required (and not
ownership).
 For liability of stevedores who are operating as independent contractors, see
eg Scruttons Ltd v Midland Silicones Ltd [1962] AC 446
28.2.2 Bailment
 See eg: J Wilson, ‘A Flexible Contract of Carriage – the Third Dimension?’
[1996] LMCLQ 187; S Baughen, ‘Bailment’s continuing role in cargo claims’
[1999] LMCLQ 393; G McMeel, ‘The Redundancy of Bailment’ [2003]
LMCLQ 169; N Palmer, 'Title to Sue in Bailment: Repudiation and the
Contractual Basis of Liability for Wrongs to Chattels' (2008) 24 Journal of
Contract Law 132; G S McBain, 'Modernising and codifying the law of
bailment' [2008] JBL 1
 As to sub-bailments see * The Pioneer Container [1994] 2 AC 324
28.3 THE HIMALAYA CLAUSE
 D G Powles, ‘The Himalaya Clause’ [1979] LMCLQ 331

 Adler v Dickson [1955] 1 QB 158 (involving a contract for the carriage of
passengers on the SS Himalaya)
 Scruttons Ltd v Midland Silicones Ltd [1962] AC 446
 The Eurymedon [1975] AC 154 (followed in Port Jackson Stevedoring Pty Ltd
v Salmon & Spraggon (Australia) Pty Ltd (The New York Star) [1980] 3 All
ER 257; ** The Starsin [2003] UKHL 12, [2004] 1 AC 715)
 Hague-Visby Rules, Article IV bis, Rule 2:
o A servant or agent of the carrier (not being an independent contractor)
can avail himself of the same defences and limitations of liability
prescribed the Rules as the carrier himself.
 Contracts (Rights of Third Parties) Act 1999 s6(5) – generally this Act does
not apply to contracts for the carriage of goods by sea
Page 38 of 68
29 HOW TO MAKE A CARGO CLAIM

What follows is a brief outline of the process that will usually be undertaken in order
to bring a claim for loss during a carriage of goods by sea. This procedure is based on
various presumptions and stipulations regarding burden of proof, which are laid down
in the Hague-Visby rules.
29.1 PROOF OF LOSS/DAMAGE
 The cargo claimant (i.e. usually the consignee or indorsee of the bill of lading
– the end buyer) needs to prove that the goods were lost or damaged in transit.
 This can be done easily if there is a clean bill of lading, and some independent
evidence that they were damaged when delivered.
 A clean bill of lading (i.e. one with no clauses to indicate otherwise) is proof
that there were no problems with the goods at the port of loading.
29.2 REBUTTING PRESUMPTIONS
 There is a presumption that the carrier has failed to take care of the cargo, and
has thus breached his duty under Art. III r 2.
 The carrier can try to argue that the damage falls under one of the exceptions
listed in Art IV, by arguing that cause of the loss or damage falls within one of
the exceptions.
 Failure to do this will mean liability for the loss or damage.
29.3 OVERRIDING EXCEPTIONS TO PRESUMPTIONS
 If the carrier succeeds in bringing the loss within one of the exceptions, he
may escape liability as the presumption of damage is then reversed.
 The only exception to this is if the cargo claimant can show that the carrier
breached his duty to provide a seaworthy ship.
o The duty to provide a seaworthy ship is an overriding obligation,
which is never subject to exceptions.
o So if the carrier is in breach of his duty to provide a seaworthy ship, he
is not allowed to rely on any of the exceptions to avoid liability.
 The burden of proving a breach of the duty to provide a seaworthy ship is on
the cargo claimant.
o He must prove two things
 (1) that the vessel was not seaworthy (unseaworthiness), and
 (2) that this unseaworthiness was the cause of the loss
(causality).
o In practice this is difficult, because they have no access to the ship, and
will have no knowledge of the condition of the ship, or what occurred
on-board the ship before it left the port of loading and while it was at
sea.
 NOTE that while there may be issues about indemnification from the shipper
to the carrier, this will NOT affect the cargo claimant’s case against the
carrier.
Page 39 of 68
29.4 TIME LIMITATIONS
 There are time limitations in making a claim.

 Article III rule 6.
o Unless notice of loss or damage and the general nature of such loss or
damage be given in writing to the carrier or his agent at the port of
discharge before or at the time of the removal of the goods into the
custody of the person entitled to delivery thereof under the contract of
carriage, or, if the loss or damage be not apparent, within three days,
such removal shall be prima facie evidence of the delivery by the
carrier of the goods as described in the bill of lading.
 Carrier and the ship discharged from all liability whatsoever in respect of the
goods, unless suit is brought within one year of their delivery or of the date
when they should have been delivered.
o This period, may however, be extended if the parties so agree (or if
they are estopped by their actions) after the cause of action has arisen.
30 DEVELOPMENTS FOLLOWING HAGUE-VISBY
 UN Convention on the Carriage of Goods by Sea 1978 – Hamburg Rules

o Articles 2 and 3
o Article 31
30.1.1 The Rotterdam Rules: Some Key Points
A. Documentation
 The ‘transport document’ – Article 1(4):
o ‘A document issued under a contract of carriage by the carrier that:
 (a) Evidences the carrier’s or a performing party’s receipt of
goods under a contract of carriage, and
 (b) Evidences or contains a contract of carriage.’
 The ‘electronic transport record’
 The absence of a requirement to have documentation
B. Issuance of the document

 Article 35 – document is issued on request
o No need for a document if
 The shipper does not ask for one
 Where the shipper and carrier have ‘agreed not to use’ one
 Where ‘it is the custom, usage or practice of the trade not to use
one’
a. The holder of the document

 The ‘holder’
o Article 1(10): a ‘person that is in possession of a negotiable transport
document’.
 Two types of documents
 Order documents
Page 40 of 68
o Possessor of order document is a holder if he is

identified in the document as the shipper, or as
the consignee, or as a person to whom the
document id duly endorsed.
 Blank endorsed order documents and bearer documents
o Possessor is holder
o No concept of ‘lawful holder’ (cf Carriage of Goods by Sea Act 1992)
 Doesn’t matter because of meaning of ‘negotiable’?
b. Negotiable Transport Document

 Article 1(15): ‘A transport document that indicates, by wording such as “to
order” or “negotiable” or other appropriate wording recognized as having the
same effect by the law applicable to the document, that the goods have been
consigned to the order of the shipper, to the order of the consignee, or to
bearer, and is not explicitly stated as being “non-negotiable” or “not
negotiable”.’
 Is a negotiable transport document the same as a document of title? Can it
perform the conveyancing function of transferring property in the goods?
 The word ‘negotiable’ has many meanings
o The Rules set out how a negotiable transport document can be created,
but not what its legal effects are.
o Must look to the context
 Definition of a ‘holder’
 Rules stating how a negotiable transport document can be
replaced by a negotiable electronic transport record (and vice
versa)
 Rules concerning carrier’s duties with regard to issuance and/or
delivery
 Rules concerning the number of originals
 Rules concerning the evidentiary effect of the document
 Rules concerning the transfer of contractual rights in the
document
 Benjamin’s Sale of Goods 18-134: ‘a negotiable transport document within the
Rotterdam Rules may, but will not necessarily, have the characteristics of a
document of title in the common law sense’ of being able to pass title to the
goods. It may also qualify as a document of title for the purposes of the
Factors Act 1889 s1(4).
2. Scope
 Article 5(1): Applies to contracts of carriage ‘in which the place of receipt and
the place of delivery are in different States’, if any of the following takes place
in a contracting State: receipt, loading, and delivery or discharge.
o Article 1(1): ‘a contract in which a carrier, against the payment of
freight, undertakes to carry goods from one place to another. The
contract shall provide for carriage by sea and may provide for carriage
by other modes of transport in addition to the sea carriage.’
 There are other exclusions, notably of charter parties (Article 6(1)(a))
Page 41 of 68
3. Parties to the Contract

 Carrier: Article 1(5): ‘a person that enters into a contract of carriage with the
shipper’
 Shipper: Article 1(8): ‘a person that enters into a contract of carriage with the
carrier’
 Carriers
o ‘Performing Party’
 Article 1(6): ‘a person other than the carrier [or the seller] that
performs or undertakes to perform any of the carrier’s
obligations under a contract of carriage’ such that the
performing party acts following the carriers’ request or under
his supervision or control
o ‘Maritime Performing Party’
 Article 1(7): ‘a performing party to the extent that it performs
or undertakes to perform any of the carrier's obligations during
the period between the arrival of the goods at the port of
loading of a ship and their departure from the port of discharge
of a ship. An inland carrier is a maritime performing party only
if it performs or undertakes to perform its services exclusively
within the port area’.
 Benjamin’s Sale of Goods 18-014: ‘although the two concepts thus serve
functionally similar purposes, and in spite of their verbal similarity to each
other, there is a significant difference under the Rules in their legal nature.’
 Compare e.g. Articles 19(1) and 20(1) with Article 18(c)
 Shippers
o ‘Documentary shipper’
 Article 1(9): ‘a person, other than the shipper, that accepts to be
named as “shipper” in the transport document’.
 Lower level of obligations than the shipper (see e.g. Article
33).
 Benjamin’s Sale of Goods 18-015: ‘The idea underlying
Article 33 seems to be that the fact of the shipper’s
being subject to an obligation or liability, or entitled to a
right or defence, will not of itself lead to the
documentary shipper’s being so subject or entitled: it
will have this effect only in the specific situations listed
in Article 33(1).’
 Consignees
o Article 1(11): ‘a person entitled to delivery of the goods under a
contract of carriage or a transport document’
o Article 54 – attempts to deal with potential situation of different
consignees being named in the contract and in the transport documents
– unclear as to whether (and if, how) it covers variations made by the
original parties
Page 42 of 68
LECTURES 13 - 15: PAYMENT METHOD IN INTERNATIONAL SALES:

DOCUMENTARY LETTER OF CREDIT
C. LECTURE OUTLINE
 Introduction
 Contracts and Stages of a Letter of Credit
 The International Chamber of Commerce Uniform Customs and Practice for
Documentary Credit (the UCP600)
 The Principle of Autonomy
 The Doctrine of Strict Compliance
 The Bill of Lading as Security
D. NOTE ON READING:
Cases of particular importance are asterisked (*). It cannot be emphasised enough that
you must also read the relevant statutory materials, ie the UCP600.
a. GENERAL READING:
 E Baskind, G Osborne and L Roach, Commercial Law (Oxford University

Press Oxford, 2013) ch 24
 Ebenezer Adodo, Letters of Credit: The Law and Practice of Compliance
(Oxford University Press, 2014)
 E MacKendrick, Goode on Commercial Law (4th edn Penguin, London 2010)
ch 35 (omit pp 1110-1142)
 L S Sealy and R J A Hooley, Commercial Law: Text Cases and Materials (4th
edn OUP, Oxford 2008) ch 21
 J Ulph, ‘The UCP 600: documentary credits in the 21st century’ [2007]
Journal of Business Law 355
b. FURTHER READING:
i. Generally
 C Murray, D Holloway and D Timson-Hunt, Schmitthoff: The Law and
Practice of International Trade (12th edn, Sweet & Maxwell, London 2012)
ch 11
 J Wilson, Carriage of Goods By Sea (7th edn Pearson Longman, Harlow
2010) chs 1-4
London 2010) (available via Westlaw) ch 23
ch 15
 J C T Chuah, Law of International Trade: Cross-Border Commercial
Transactions (5th edn, Sweet & Maxwell, London 2013) 11-042 et seq
 M G Bridge (ed), Benjamin’s Sale of Goods (8th edn Sweet & Maxwell,
London 2010) (available via Westlaw) (Part 7, chapter 23)
Page 43 of 68
ii. Specifically on Documentary Credit

 P Todd, Bills of Lading and Banker’s Documentary Credits (3rd edn, LLP,
London 1998)
 W Hedley and R Hedley, Bills of Exchange and Banker’s Documentary
Credits (4th edn, LLP, London 2000)
 M Kurkela, Letters of Credit and Bank Guarantees under International Trade
Law (2nd edn, OUP, Oxford 2008)
 J E Sifri, Standby Letters of Credit: A Comprehensive Guide (Palgrave
Macmillan, Basingstoke 2008)
 A Malek and D Quest, Jack: Documentary Credits: The Law and Practice of
Documentary Credits including Standby Credits and Demand Guarantees (4th
edn, Tottel, London 2009)
 P Ellinger and D Neo, The Law and Practice of Documentary Letters of Credit
(Hart, Oxford 2010)
 N Enonchong, The Independence Principle of Letters of Credit and Demand
Guarantees (OUP, Oxford 2010)
 D Horowitz, Letters of Credit and Demand Guarantees: Defences to Payment
(OUP, Oxford 2010)
 R Mann, ‘The Role of Letters of Credit in Payment Transactions’ (2000) 98
Mich L Rev 2494
 H Bennett, ‘Original sins under the UCP’ [2001] LMCLQ 88
 R Hooley, ‘Fraud and Letters of Credit: is there a Nullity Exception?’ [2002]
61 CLJ 279
 G Xiang and R P Buckley, ‘A comparative analysis of the standard of fraud
required under the fraud rules in letter of credit law’ (2003) Duke J of Comp
and Int Law 293
 L Y Chin and Y K Wong, ‘Autonomy - A Nullity Exception at Last?’ [2004]
LMCLQ 14 (case comment on Beam Technology (Manufacturing) Pte Ltd v
Standard Chartered Bank [2003] 1 SLR 597 (Sing CA)
 N Enonchong, “The Autonomy Principle of Letters of Credit: An Illegality
Exception?” [2006] LMCLQ 404
 M Isaacs and M Barnett, ‘International trade Finance – Letters of credit, UCP
and Examination of Documents’ [2007] Journal of International Banking Law
and Regulation 660, available at
http://www.addleshawgoddard.com/asset_store/document/article_int_trade_fin
ance_1416.pdf
 E Ellinger, ‘The Uniform Customs and Practice for Documentary Credits
(UCP): Their Development and the Current Revisions’ [2007] LMCLQ 152
 C Debatista, ‘The New UCP 600 – Changes to the Tender of the Seller’s
Shipping Documents under Letters of Credit’ [2007] Journal of Business Law
329
 K Donnelly, ‘Nothing for Nothing: a Nullity Exception in Letters of Credit?’
[2008] Journal of Business Law 316
 P Ellinger, ‘Rejection of Documents Tendered Under a Letter of Credit’
[2013] LMCLQ 1
Page 44 of 68
E. INTRODUCTION AND CONTEXT

a. NECESSITY OF FINANCING SALES
 Cash
 Part Cash, Part Credit
o Secured Credit
 Consignment – Buyer holds goods as bailee until the goods are
appropriated to the contract (usually by sub-sale)
o Unsecured Credit
 Third Party Payment
o Suretyship
o Standby Credit
o Documentary Credit
b. THE DOCUMENTARY CREDIT
 United City Merchants (Investments) Ltd v Royal Bank of Canada (The

American Accord) [1982] 2 QB 208, 222
o Documentary credits are ‘the life blood of international commerce’.
 Goode 1059: ‘A documentary credit is, in essence, a banker’s assurance of
payment against presentment of specified documents.’
 UCP 600 Article 2: A documentary credit is ‘any arrangement, however
named or described, that is irrevocable and thereby constitutes a definite
undertaking of the issuing bank (the bank that issues a credit at the request of
an applicant or on its own behalf) to honour a complying presentation.’
F. THE UNIFORM CUSTOMS AND PRACTICES OF DOCUMENTARY

LETTERS OF CREDIT (UCP 600)
 Uniform Customs and Practice for Documentary Credits (UCP)

o Versions in 1933, 1951, 1966, 1974, 1983, 1993 and 2006
o The 2006 version, known at UCP600, came into force on 1 July 2007.
o Carr, International Trade Law 469: ‘The 2007 version is leaner than
the [previous version] and is more user-friendly.’
o The UCP has been supplemented by an electronic version (eUCP) –
this provides essentially the same rules as for tangible documents,
changing the context where necessary for issues such as presentation
and signature.
o Uniform Rules for Demand Guarantees
 Wuhan Guoyo Logistics Group Co Ltd v Emporiki Bank of
Greece SA [2013] EWCA Civ 1679
 On demand performance guarantee; where a proper
demand is made, but a second instalment has been
properly determined as not in fact due, then moneys
paid over is not held on trust by seller-beneficiary, or
buyer, for bank. To hold otherwise would be a
‘heretical proposition’ (para 2, Tomlinson LJ), in the
context of international trade, where the approach is that
the performance requirement is autonomous.
Page 45 of 68
o International Standby Practices
a. SCOPE OF UCP 600
 UCP 600 Article 1: UCP 600 applies to ‘irrevocable letters of credit’

 It is a “commercial assumption” that banks intend application, in practice
assume UCP ALWAYS applies to a letter of credit.
o Relationship between UCP 600 and International Standards of Banking
Practice (ISBP: ICC Publication 681 (2007 revision))
o Relationship between UCP 600 and e-UCP 600
 UCP does not have force of law in English law; the terms have to be
specifically incorporated into contracts.
 Mapping UCP 600:
o (i) Articles 1-3: general definitions;
o (ii) Articles 4-8 & 14-16: Liability and responsibility of banks
examining presented documents;
o (iii) Articles 9-11: Form and notification of credits;
o (iv) Articles 12-13: Nominated banks;
o (v) Articles 17-28: Requirements regarding particular documents;
o (vi) Articles 29-37: Miscellaneous provisions
 All credits are “sight”, “deferred”, “accepted” or “negotiated”.
o Payment can also be made on reserve
o *Banque de l’Indochine v Rayner [1983] QB 711 (CA)
 Other definitions provided by UCP 600 Article 2:
o ‘advising bank’, ‘applicant’, ‘beneficiary’, ‘banking day’, ‘complying
presentation’; ‘confirmation’, ‘confirming bank’, ‘honour’, ‘issuing
bank’, ‘negotiation’, ‘presentation’, ‘presenter’.
 2 fundamental principles:
o Autonomy
o Compliance
b. THE IMPORTANCE OF THE CONTRACT OF SALE
 On the effect of the terms of the contract (or their absence) on documentary
credits, see eg Ficom SA v Sociedad Cadax Ltd [1980] 2 Lloyd’s Rep 118
 Schijveshuurder v Canon (Export) Ltd [1952] 2 Lloyd’s Rep 196
 Shamser Jute Mills Ltd v Sethia (London) Ltd [1987] 1 Lloyd’s Rep 388
 Kronos Worldwide Ltd v Sempra Oil Trading SARL [2004] 1 Lloyd’s Rep 260
i. Relationship between letter of credit and sales contract
 The letter of credit must comply with the underlying contract of sale
 Glencore Grain Rotterdam BV v Lebanese Organisation for International
Commerce [1997] 4 All ER 514
G. STAGES IN THE DOCUMENTARY CREDIT TRANSACTION

Abstractly:
 The contract of sale prescribes payment by letter of credit, and any specific
terms.
Page 46 of 68
 The buyer opens the credit via the issuing bank in his country.
 The issuing bank arranges for an advising/confirming bank in the sellers
country.
 The seller ships the goods and tenders the documents to the
advising/confirming bank.
 If the documents conform to what is required under the documentary credit,
the seller will be paid.
Note the following:-

 Parties: buyer, seller, issuing bank, advising/confirming bank
 The mandate (instructions)
 All credits are irrevocable under UCP 600
 Confirmed/Unconfirmed; the vast majority of L/C’s confirmed
 Contracts generated by a letter of credit.
 C1-C4 as described by Lord Diplock in United City Merchants v Royal Bank
of Canada (The American Accord) [1982] 2 All ER720 (HL).
 C5 the abstract payment undertaking inherent herein.
Page 47 of 68
How this works closer to reality:

1. Trotter’s Independent Traders are the sellers; The Barksdale Corporation is the
buyer.
2. The Barksdale Corporation applies to his bank in Baltimore to open credit in
favour of Trotter’s Independent Traders.
a. The Barksdale Corporation will present various documents as required
by the bank
i. See eg Commercial Banking Co of Sydney Ltd v Jalsard Ltd
[1973] AC 279
ii. Credit Agricole Indosuez v Muslim Commercial Bank Ltd
[2000] 1 Lloyd’s Rep 275
iii. UCP Articles 19-24 – provides that multimodal transport
documents, marine bills of lading, non-negotiable sea waybills,
charterparty bills of lading, air transport documents, and road
and rail documents are acceptable transport documents.
b. The Baltimore bank is the issuing bank
i. UCP Article 2 – ‘The bank that issues a credit at the request of
an applicant or on its own behalf’
3. The Baltimore bank instructs its correspondent bank in London to advise
Trotter’s Independent Traders that the credit has been opened in their favour
a. The Baltimore and London banks will have a contractual relationship
i. See eg Bayerische Vereinsbank Aktiengesellschaft v National
Bank of Pakistan [1997] 1 Lloyd’s Rep 59
b. If the credit is a confirmed credit, then the confirmation will be added
to the advice. Confirmed credit is discussed below.
4. Trotter’s Independent Traders ship the goods provided the letter of credit
conforms to the contract of sale
5. On shipment, Trotter’s Independent Traders will get the transportation
documents and other documentation, and will present them to the London
bank.
a. Normally the London bank will want a clean document, though this is
not essential and the parties can agree to a noted document
b. UCP Article 27 – a clean document is which ‘bears no clause or
notation which expressly declares a defective condition of the goods or
the packaging’
6. The London bank will effect payment.
a. This can be payment on presentation, or deferred payment, or by bill of
exchange drawn in Trotter’s Independent Traders favour, or a
negotiable bill of exchange drawn on The Barksdale Corporation or the
Baltimore bank.
7. The London bank forwards the documents to the Baltimore bank for
reimbursement. The Baltimore bank passes the document on to The Barksdale
Corporation and will collect payment from them.
Page 48 of 68
a. OPENING THE LINE OF CREDIT
 Etablissements Chainbaux SARL v Harbourmaster Ltd [1955] 1 Lloyds Rep

303; Trans Trust v Danubian Trading Co [1952] 2 QB 297
 Bunge Corp v Vegetable Vitamin Foods (Private) Ltd [1985] 1 Lloyds Rep
613
i. Shipping date
 Plasicmoda Societa per Azioni v Davidsons (Manchester) Ltd [1952] 1
Lloyd’s Rep 527, 538 (Denning LJ)
ii. Shipping period
 Pavia & Co SPA v Thurmann-Nielsen [1952] 2 QB 84
 Ian Stach, Ltd v Baker Bosly, Ltd [1958] 2 QB 130
iii. Waiver
 Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473
b. THE CONTRACT BETWEEN BUYER AND ISSUING BANK

i. Nature of instructions
 The buyer’s instructions must be clear and precise
 European Asian Bank AG v Punjab and Sind Bank (No 2) [1983] 1 WLR 642.
 Midland Bank v Seymour [1955] 2 Lloyd’s Rep 147.
 Commercial Banking Co of Sydney v Jalsard Pty Ltd [1973] AC 279 (PC)
o ‘By issuing the credit, the banker does not only enter into a contractual
obligation to his own customer, the buyer, to honour the seller’s drafts
if they are accompanied by the specified documents. By confirming the
credit to the seller through his correspondent at the place of shipment
he assumes a contractual obligation to the seller that his drafts on the
correspondent bank will be accepted if accompanied by the specified
documents, and a contractual obligation to his correspondent bank to
reimburse it for accepting the seller’s drafts. The banker is not
concerned as to whether the documents for which the buyer has
stipulated serve any useful commercial purpose or as to why the
customer called for tender of a document of a particular description.
Both the issuing banker and his correspondent bank have to make
quick decisions as to whether a document which has been tendered by
the seller complies with the requirements of a credit at the risk of
incurring liability to one or other of the parties to the transaction if the
decision is wrong. Delay in deciding may in itself result in a breach of
his contractual obligations to the buyer or to the seller. This is the
reason for the rule that where the banker's instructions from his
customer are ambiguous or unclear he commits no breach of his
contract with the buyer if he has construed them in a reasonable sense,
even though upon the closer consideration which can be given to
questions of construction in an action in a court of law, it is possible to
say that some other meaning is to be preferred.’
Page 49 of 68
c. TENDER OF THE DOCUMENTS BY THE SELLER
 Soproma SpA v Marina and Animal By-Products Corp [1966] 1 Lloyd’s Rep
367
 W J Alan and Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189
 Man, E D and F Ltd v Nigerian Sweets and Confectionary Co Ltd [1977] 2
Lloyd’s Rep 50
 On the effect of treating the documentary credit as conditional, and the
potential losses caused to an innocent party following the insolvency of the
bank, see eg Ng Chee Chong et al (Trading as Maran Road Saw Mill) v Austin
Taylor and Co Ltd [1975] 1 Lloyd’s Rep 156
 On the effect of non-acceptance, see e.g. Standard Chartered Bank v
Dorchester LNG (2) Limited (“The Erin Schulte”) [2014] EWCA Civ 1382
d. THE OBLIGATION OF THE BANK TO THE SELLER
 UCP 600 Article 14(a):

o ‘A nominated bank acting on its nomination, a confirming bank, if any,
and the issuing bank must examine a presentation to determine, on the
basis of the documents alone, whether or not the documents appear on
their fact to constitute a complying presentation.’
o Compare with UCP 500 Article 13(a):
 ‘Banks must examine all documents stipulated in the credit
with reasonable care, to ascertain whether or not they appear,
on their face, to be in compliance with the terms and conditions
of the credit. Compliance of the stipulated documents on their
face with the terms and conditions of the credit, shall be
determined by international standard banking practice as
reflected in these Articles. Documents which appear on their
face to be inconsistent with one another will be considered as
not appearing on their face to be in compliance with the terms
and conditions of the credit.’
 Gian Singh and Co Ltd v Banque de l’Indochine [1974] 1 WLR 1234
 UCP600 Article 14(b) – the bank has five days to examine the documents.
o Swotbooks.com Ltd v Royal Bank of Scotland plc [2011] EWHC 2025
 UCP600 Article 15
o (a) When an issuing bank determines that a presentation is complying,
it must honour.
o (b) When a confirming bank determines that a presentation is
complying, it must honour or negotiate and forward the documents to
the issuing bank.
o (c) When a nominated bank determines that a presentation is
complying and honours or negotiates, it must forward the documents to
the confirming bank or issuing bank.
 UCP600 Article 16(b)
o ‘Where the issuing bank determines that a presentation does not
comply, it may be in its sole judgment approach the applicant for a
waiver of the discrepancies. This does not, however, extend the [five
day limit].’
Page 50 of 68
o ‘(c) When a nominated bank acting on its nomination, a confirming
bank, if any, or the issuing bank decides to refuse to honour or
negotiate, it must give a single notice to that effect to the presenter [ie
the seller, who presents the documents] The notice must state:
(i) that the bank is refusing to honour or negotiate; and
(ii) each discrepancy in respect of which the bank refuses to honour or
negotiate; and
(iii) (a) that the bank is holding the documents pending further
instructions from the presenter; or
(b) that the issuing bank is holding the documents until it
receives a waiver from the applicant [ie the buyer] and agrees
to accept it, or receives further instructions from the presenter
prior to agreeing to accept a waiver; or
(c) that the bank is returning the documents; or
(d) that the bank is acting in accordance with the instructions
previously received from the presenter.
(d) The notice required in sub-article 16(c) must be given by
telecommunication or, if that is not possible, by other expeditious means no
later than the close of the fifth banking day following the day of presentation.’
 Swiss Singapore Overseas Enterprises Pte Ltd v China CITIC Bank
Corporation Ltd [2013] HKCFI 1291; [2014] 1 HKC 96; analysed in J Zhang,
‘A heavy price paid for notice of refusal under UCP600’ [2014] Shipping &
Trade Law 1
 UCP600 Article 6(d)
o ‘(i) A credit must state an expiry date for presentation. An expiry date
stated for honour or negotiation will be deemed to be an expiry date for
presentation.
(ii) The place of the bank with which the credit is available is the place
for presentation. The place for presentation under a credit available
with any bank is that of any bank. A place for presentation other than
that of the issuing bank is in addition to the place of the issuing bank.’
 Another method is to get the bank to accept the documents and make payment
‘under reserve’. What is the meaning of ‘payment under reserve’?
o Banque de l’Indochine et de Suez SA v JH Rayner (Mincing Lane) Ltd
[1983] QB 711, 733 (Kerr LJ)
 ‘I would regard this as a binding agreement between the
confirming bank and the beneficiary by way of a compromise
to resolve the impasse created by the uncertainty of their
respective legal obligations and rights.’
o Sir John Donaldson MR provided (at 727-8) this informative
hypothetical dialogue, explaining the commercial reality of such
situations:
 ‘Merchant: "These documents are sufficient to satisfy the terms
of the letter of credit and certainly will be accepted by my
buyer. I am entitled to the money and need it."
 Bank: "If we thought that the documents satisfied the terms of
the letter of credit, we would pay you at once. However, we do
not think that they do and we cannot risk paying you and not
Page 51 of 68
being paid ourselves. We are not sure that your buyer will
authorise payment, but we can of course ask."
 Merchant: "But that will take time and meanwhile we shall
have a cash flow problem."
 Bank: "Well the alternative is for you to sue us and that will
also take time."
 Merchant: "What about your paying us without prejudice to
whether we are entitled to payment and then your seeing what
is the reaction of your correspondent bank and our buyer?"
 Bank: "That is all right, but if we are told that we should not
have paid, how do we get our money back?"
 Merchant: "You sue us."
 Bank: "Oh no, that would leave us out of our money for a
substantial time. Furthermore it would involve us in facing in
two directions. We should not only have to sue you, but also to
sue the issuing bank in order to cover the possibility that you
might be right. We cannot afford to pay on those terms."
 Merchant: "All right. I am quite confident that the issuing bank
and my buyer will be content that you should pay, particularly
since the documents are in fact in order. You pay me and if the
issuing bank refuses to reimburse you for the same reason that
you are unwilling to pay, we will repay you on demand and
then sue you. But we do not think that this will happen."
 Bank: "We agree. Here is the money 'under reserve.'"’
e. CONTRACT BETWEEN ISSUING BANK AND

ADVISING/CONFIRMING BANK
 Bank Melli Iran v Barclays Bank [1951] 2 Lloyd’s Rep 367

 UCP 600 Article 7
o IB must honour complying presentation and reimburse nominated bank
o Honour means
 To pay at sight if sight-payment credit, or at relevant time if
deferred credit, or to accept a bill of exchange (draft) for the
credit amount
o Article 6(b)
 Every letter of credit must state how beneficiary is to be paid
f. CONTRACT BETWEEN BANKS AND SELLER
 IB is agent of buyer, but acts as principal in relation to seller

o Undertakes that payment will be made on presentation of conforming
documents
o CB must pay seller if compliant presentation
Page 52 of 68
o Bank has right and duty to examine documents
g. EFFECT OF PAYMENT BY DOCUMENTARY CREDIT
 Once it has been agreed that payment shall be by documentary credit, it is not
open to the seller to ignore the credit and tender the documents directly to the
buyer: Soproma SpA v Marina and Animal By-Products Corp [1966] 1
Lloyd’s Rep 367
H. FURTHER EXPLANATIONS OF THE PARTIES TO THE OPERATION OF

THE DOCUMENTARY CREDIT
a. APPLICANT FOR THE CREDIT AND THE BENEFICIARY
 The buyer (of the underlying sale transaction) is the applicant for the credit.
 The applicant applies to a banker in his own country to open a credit in favour
of the beneficiary (seller).
b. ISSUING BANK
 The buyer’s bank. At the buyer’s request and instructions (and as his agent),
the issuing bank issues a notice to the seller that the credit has been opened in
his favour.
c. NOMINATED BANK
 Advising bank. The issuing bank may well arrange for another bank in the
seller’s country to advise the seller of the opening of the letter of credit. This is
the advising bank – it advises the seller (beneficiary) on the opening of the
credit (acting on the instructions/request and as the agent of the issuing bank).
It incurs no liability towards the seller: UCP 600, Article 12.
 Confirming bank. The issuing bank may ask the advising bank to add its own
undertaking to pay against presentation of documents. The bank is authorised
or required to confirm the credit and, in doing so, it adds its own independent
undertaking to pay the seller (and acts as a principal). The additional promise
to pay is described as ‘confirming the credit’ and the bank is called the
‘confirming bank.’ It irrevocably binds the confirming bank to the seller: UCP
600, Article 2, Article 8.
 Den Danske Bank A/A v Surinam Shipping Ltd [2014] UKPC 10; [2014]
Lloyd’s Rep 52 (nb under UCP500)
I. CHARACTERISTICS OF DOCUMENTARY CREDIT

a. NATURE OF THE DOCUMENTS
i. Complying presentation.
 UCP 600, Article 2: ‘a presentation that is in accordance with the terms and
conditions of the credit, the applicable provisions of these rules and
international standard banking practice.’
Page 53 of 68
ii. Documents to be supplied

 Hansson v Hamel & Horley Ltd [1922] 2 AC 36; J H Rayner & Co Ltd v
Hambro’s Bank [1943] 1 KB 37.
 The UCP 600 provides express guidance in relation to key documents:
o Article 18: commercial invoice;
o Article 19: transport documents covering at least two different modes
of transport;
o Article 20: bill of lading;
o Article 21: non-negotiable sea waybill;
o Article 22: charter party bill of lading;
o Article 23: air transport document;
o Article 24: rail or inland water transport document.
o Article 27: banks will only accept clean transport documents.
iii. Irrevocable
 Under previous UCPs, it was possible for documentary credit to be revocable
or irrevocable.
o This does not mean they are unenforceable, it just means that parties
using revocable credit will have to use UCP500 (ie the 1993 version).
o UCP500 Article 8(a) – a revocable credit is a credit which ‘may be
amended or cancelled by the issuing bank at any moment and without
prior notice to the beneficiary [prior to acceptance of the transfer
documents].’
o Cape Asbestos Co Ltd v Lloyds Bank Ltd [1921] WN 274
 UCP 600, Article 3: letters of credit are irrevocable.
1. When does the credit become irrevocable?

 Urquhart Lindsay and Co v Eastern Bank Ltd [1922] 1 KB 318, 321-2
 Dexters Ltd v Schenkers Ltd (1923) 14 Lloyd’s L Rep 586, 588
2. Irrevocable Confirmed Credit

 Wahbe Tamari and Sons Ltd v Calprogecca-Soceidada Geral de Fibras
[1969] 2 Lloyd’s Rep 18
 Ian Stach Ltd v Baker Bosely Ltd [1958] 2 QB 130
 UCP600 Article 2 – confirmation is a ‘definite undertaking of the confirming
bank, in addition that of the issuing bank, to honour or negotiate a complying
presentation’
 UCP600 Article 8(a) – provided that the relevant documents are presented to
the confirming bank, the confirming bank must honour the credit by making
payment.
iv. Theoretical problems with doctrine of consideration
 The seller will always prefer irrevocable, confirmed credit.
 There are contractual relationships in this type of case between:
o Seller and buyer because of the contract of sale
o Buyer and issuing bank because of the arrangements made to open the
line of credit
o Issuing bank and advising bank
o Issuing bank and seller
Page 54 of 68
 Hamzeh Malas v British Imex Industries Ltd [1958] 2 QB 127, 129.

 Uniform Commercial Code §5-105
v. Transferable Credits
 Trotter’s Independent Traders sells to The Barksdale Corporation some goods.
But Trotter’s Independent Traders does not make those goods. Trotter’s
Independent Traders has to buy the goods from the manufacturer. Using
transferable credits enables Trotter’s Independent Traders to pay the
manufacturer by transferring the rights and duties regarding the documents to
the manufacturer, who gets paid by the line of credit set up by The Barksdale
Corporation.
 See eg Bank Negara Indonesia 1946 v Lariza Singapore Ltd [1988] AC 583 –
transferable credits need the express agreement of the parties and the issuing
bank.
b. AUTONOMY
 See generally:
o Hamzeh Malas and Sons v British Imex Industries Ltd [1958] 2 QB
127
o United City Merchants (Investments) Ltd v Royal Bank of Canada
[1983] 1 AC 168
o Montrod Ltd v Grundkotter Fleischevertirebs GmbH, Standard
Chartered Bank [2001] EWCA Civ 1954
 * Discount Records v Barclays Bank [1975] 1 Lloyd’s Rep 444 (Megarry J):
o ‘I would be slow to interfere with bankers’ irrevocable credits, and not
least in the sphere of international banking, unless a sufficiently grave
cause is shown; for interventions by the court that are too ready or too
frequent might gravely impair the reliance which, quite properly, is
placed on such credits.’
 UCP600 Article 4:
o ‘(a) A credit, by its nature, is a separate transaction from the sale or
other contract on which it may be based. Banks are in no way
concerned with or bound by such contract, even if any reference
whatsoever to it is included in the credit. Consequently, the
undertaking of a bank to honour, to negotiate or to fulfil any other
obligation under the credit, is not subject to claims or defences by the
applicant resulting from his relationships with the issuing bank or the
beneficiary. A beneficiary can in no case avail himself of the
contractual relationships existing between the banks or between the
applicant and the issuing bank.
o (b) An issuing bank should discourage any attempt by the applicant to
include as an integral part of the credit, copies of the underlying
contract, proforma invoice and the like’
 UCP Article 5:
o ‘Banks deal with documents, and not with goods, services or
performance to which the documents may relate.’
o Discount Records Ltd v Barclays Bank Ltd [1975] 1 Lloyd’s Rep 444.
Page 55 of 68
o Power Curber International Ltd v National Bank of Kuwait [1981] 1

WLR 1233, 1241 (Lord Denning MR):
 ‘it is vital that every bank which issues a letter of credit should
honour its obligations. The bank is in no way concerned with
any dispute that the buyer may have with the seller. The buyer
may say that the goods are not up to contract. Nevertheless, the
bank must honour its obligations. The buyer may say he has a
cross-claim in a large amount. Still, the bank must honour its
obligations. No set-off or counterclaim is allowed to detract
from it … a letter of credit is given by a bank to the seller with
the very intention of avoiding anything in the nature of a set-off
or counterclaim.’
c. ‘ILLEGALITY’
 United City Merchants (Investments) Ltd v Royal Bank of Canada [1983] 1

AC 168
 Mahonia Ltd v J P Morgan Chase Bank [2003] EWHC 1927 (Comm)
d. ONLY ONE EXCEPTION TO AUTONOMY PRINCIPLE: FRAUD
 Discount Record Ltd v Barclays Bank Ltd [1975] 1 Lloyd’s Rep 444
 The Society of Lloyd’s v Canadian Imperial Bank of Commerce [1993] 2
Lloyd’s Rep 579
 United Trading Corp SA and Murray Clayton Ltd v Allied Arab Bank Ltd
[1985] 2 Lloyd’s Rep 554
 United City Merchants (Investments) Ltd v Royal Bank of Canada (The
American Accord) [1983] 1 AC 168, 183 (Lord Diplock)
o ‘where the seller, for the purpose of drawing on the credit, fraudulently
presents to the confirming bank documents that contain, expressly or
by implication, material representations of fact that to his knowledge
are untrue [then there is an exception to the bank’s obligation to pay on
those documents]’
o See further Banco Santander SA v Bayfern Ltd [2000] 1 All ER
(Comm) 76
 R D Harbottle (Mercantile) Ltd v National Westminster Bank [1978] QB 146,
155-156 (Kerr J)
o ‘It is only in exceptional cases that the courts will interfere with the
machinery of irrevocable obligations assumed by banks. They are the
life blood of international commerce. Such obligations are regarded as
collateral to the underlying rights and obligations between the
merchants at either end of the banking chain. Except possibly in clear
cases of fraud of which the banks have notice, the courts will leave the
merchants to settle their disputes under the contracts by litigation or
arbitration as available to them or stipulated in the contracts. The
courts are not concerned with their difficulties to enforce such claims:
these are the risks which the merchants take … The machinery and
commitments of the banks are on a different level. They must be
allowed to be honoured, free from interference from the courts.
Page 56 of 68
Otherwise trust in international commerce could be irreparably

damaged.’
o See further: Rafsanjan Pistachio Producers Co-operative v Bank
Leumi (UK) plc [1992] 1 Lloyd’s Rep 513; Themehelp Ltd v West
[1996] QB 84
i. The US development of the fraud exception
 Sztejn v Henry Schroder Banking Corp (NY 1941) 31 NYS 2d 631, 634-635:
o The fraud exception applies where the ‘seller has intentionally failed to
ship any goods ordered by the buyer’
 On the various interpretations given to ‘intentionally’, see eg New York Life
Insurance Co v Hartford National Bank and Trust Co (Conn 1977) 378 A2d
562; NMC Enterprises v Columbia Broadcasting System, Inc (NY Sup Ct
1974) 14 UCC Rep Serv 1427; United Bank Ltd v Cambridge Sporting Goods
Corp (NY 1976) 392 NYS2d 265; Dynamics Corp of America v Citizens and
Southern National Bank (ND Ga 1973) 356 F Supp 991.
 See also Uniform Commercial Code §5-109 for a standard of fraud for letters
of credit.
ii. Requirements of the fraud exception
 Three CUMULATIVE requirements for the autonomy principle to be broken:
o Fraud must be the beneficiary’s OWN fraud
 *United City Merchants v Royal Bank of Canada (The
American Accord) [1982] 2 All ER 720 (HL)
o Fraud must be PROVEN; a mere allegation will not suffice
 * Discount Records v Barclays Bank [1975] 1 Lloyd’s Rep 444
o Fraud must be notified to bank BEFORE they make payment
iii. Generally on Risk
 Banks’ Risks:
o Banco Santander v Paribas [2000] 1 All ER (Comm) 776
o Now: UCP 600 Articles 7(c), 8(c) and 12(b)
J. THE EXAMINATION OF DOCUMENTS AND THE DOCTRINE OF

[STRICT] COMPLIANCE
 UCP 600 Article 2: Compliant presentation of documents

 UCP 600 Article 14(a): Examination of the presentation on the basis of the
documents alone
a. THE DOCTRINE OF STRICT COMPLIANCE:
 *Equitable Trust Co v Dawson (1927) 27 Lloyd’s L Rep 49 (HL) 52 (Viscount

Sumner):
o ‘There is no room for documents which are almost the same, or which
will do just as well. Business could not proceed securely on any other
lines. The bank’s branch abroad, which knows nothing officially about
the details of the transaction thus financed, cannot take upon itself to
decide what will do well enough and what will not.’
 *J H Rayner & Co Ltd v Hambros Bank Ltd [1943] 1 KB 37 (CA)
Page 57 of 68
 Moralice (London) Ltd v ED and F Man [1954] 2 Lloyd’s Rep 526

 Seaconsar v Far East Ltd v Bank Makazi Jomhouri Islami Iran [1993] 1
Lloyd’s Rep 236; [1994] 1 Lloyd’s Rep 1
 Fortis Bank SA/NV and Another v Indian Overseas Bank [2009] EWHC 2303
(Comm), [2010] 1 Lloyd’s Rep 227
i. List of exceptions introduced by UCP 600 and/or
common law:
1. Elder Dempster Lines Ltd v Ionic Shipping Agency Inc [1968] 1 Lloyd’s Rep
529
2. *Kredietbank Antwerp v Midland Bank plc [1999] 1All ER (Comm) 801 (CA)
o See also International Standards of Banking Practice (ISBP: ICC
Publication 681 (2007 revision) now incorporated into UCP 600.
3. *Hing Yip Hing Fat Co Ltd v The Daiwa Bank Ltd [1991] 2 HKLR 35
4. UCP 600 Article 3
5. UCP 600 Article 14(d)
6. UCP 600 Article 14(e) (read in conjunction with UCP 600 Article 18
7. UCP 600 Article 14(g)
8. UCP 600 Article 14(h)
9. UCP 600 Article 14(j)
11. UCP 600 Article 20(b)
o Glencore International AG v Bank of China [1996] 1 Lloyd’s Rep 135
o Kredietbank Antwerp v Midland Bank plc [1998] Lloyd’s Rep Bank
173; [1999] Lloyd’s Rep Bank 219
Page 58 of 68
TUTORIAL QUESTIONS
SCHEDULE OF THE TUTORIALS
Week Tutorial Cycle Main topic covered

29 & 30 1 Sales on CIF terms
31 & 32 2 Sales on FOB terms
33 & 34 3 Carriage of goods contract
35 & 36 4 Payment of purchase price by means of letter of credit
TUTORIAL 1: CIF CONTRACTS
READING
See the reading list for Lectures 2 – 4.
PREPARATION
All students must bring an outline answer for each question. This should be in the
form of a bullet-point response of one page per question. These outlines will be
checked in the tutorial. Any student who fails to bring outline answers may be asked
to leave on the grounds of non-preparation.
FURTHER INSTRUCTIONS: There are four sub-questions comprising tutorial

cycle 1, immediately following the hypothetical facts below.
QUESTION ON CIF CONTRACTS

Olympia Oil plc makes two separate contracts with Petrotrade GmbH of Hamburg,
each to buy 10,000 tonnes of Grade A gas oil at a price of £200 per tonne CIF
London. Under each contract, payment is to be against a full set of bills of lading,
commercial invoice, certificate of insurance and certificate of origin, and the oil is to
be shipped during July/August. In due course, Petrotrade buys 20,000 tonnes of gas
oil already afloat to fulfil the two contracts and immediately sends to Olympia notices
of appropriation. The oil forms part of a total cargo of 250,000 tonnes, half of which
is to be discharged at Southampton en route to London.
The oil had been received for shipment on 30 August, but loading did not take place
until 1 September. Owing to negligent navigation, the vessel collided with the dock
when it was attempting to leave the port of loading. This resulted in a rupture in the
hold, leaving the entire cargo in damaged condition.
Page 59 of 68
The documents tendered by Petrotrade to Olympia included bills of lading showing

the oil as shipped on 30 August, invoices and certificates of insurance. But neither a
certificate of origin nor an insurance policy was among the presented documents.
Tender of the documents and payment occurred shortly after the vessel called at
Southampton.
Unknown to Petrotrade or Olympia before discharge, all the oil was in fact Grade B
gas oil.
(a) Applying the law prior to the coming into force of the Sale of Goods
(Amendment) Act 1995, when would property have passed to Olympia under the two
contracts? Considering the changes to the Sale of Goods Act 1979 made by the 1995
Act, when would property now pass? In what circumstances would the passing of
property be relevant in a CIF contract?
(b) Was Olympia obliged to pay Petrotrade on tender of the documents?
(c) If Olympia paid against the documents, what rights, if any, would it have against
Petrotrade when the vessel arrived in London? (N.B. Upon discharge, the port
authorities impounded the oil because it lacked a certificate of origin. It will be costly
to have the oil released.)
(d) If Olympia paid against the documents and accepted the oil on arrival, what rights,
if any, would it have under any of the contracts involved?
 Turn to the next page for Tutorial cycle 2 question
Page 60 of 68
TUTORIAL 2: FOB CONTRACTS
In April 2016, Nicodemus & Company of Ruritania sold 10,000 tonnes of Basmati
rice to FairPrice (UK) Limited at £300 per ton FOB Ruritania. The fob contract was
expressed subject to English law. Shipment was to be made during September 2016;
buyer to give 10 days’ notice of readiness to load. As of the contract date, Ruritanian
Government Regulation No.593 required an export licence to cover any export of
certain commodities, including Basmati rice, exceeding 5,000 tons at a fee equivalent
to £1,000 per licence for every 5000 tons.
On 8 September 2016 FairPrice nominated The Ocean Emperor, owned by Meridian

Shipping Line, for the carriage of the cargo. However, a week later, the vessel
suffered severe technical problems on her way to Ruritanian port. FairPrice
immediately nominated another ship The Hercules, whose captain then notified
Nicodemus that the ship will be ready to take up goods on 27 September 2016. The
vessel duly arrived at the port and berthed, but the stevedores were on strike. In the
meantime, owing to exceptionally heavy rainfall and flooding in most parts of India,
poor harvests increased prices of agricultural products across the board. In effect,
Basmati rice became £950 per ton. The export licence fee also rose from £1,000 to
£3,500 per licence for every 3000 tons; and unlike previously, payment of the fee
would not guarantee Nicodemus obtaining the licence unless nearly the same amount
was paid to the private pockets of certain Ruritanian government employees.
The stevedores’ strike was called off at about 11am on 29 September 2016. Almost
simultaneously, the master of the vessel The Hercules communicated the ‘good news’
of the resolution of the industrial action to Nicodemus and advised that the ship was
ready to load. Nicodemus declined to accept the request, pointing to the unfortunate
circumstances affecting the exportation of basmati rice, and adding that, according to
its own information, the strike in fact remained live and far from full settlement.
 Advise FairPrice, who wishes to sue Nicodemus.
Page 61 of 68
TUTORIAL 3
CARRIAGE OF GOODS CONTRACT
READING
See the reading list for lectures 8 - 12.
PREPARATION
QUESTION
Singa Lines owns Colocotronis Angelica and operates a liner service between
Singapore and London. Hitchens shipped the following goods on board the vessel.
(a) 500 manau cane chairs

(b) 500 bales of batik cloth
(d) 500 tons of canned Malaysian pineapples
A set of bills of lading was issued in respect of each of the cargoes and Hitchens
demanded that all the bills were issued in accordance with Article III rule 3 of Hague-
Visby Rules. Except for the bill of lading in respect of the batik cloth, all the bills of
lading stated that the goods were shipped in apparent good order and condition. On
the bill of lading regarding the batik cloth, the printed words ‘shipped in apparent
good order and condition’ were crossed out, and the bill was stamped with ‘contents
not inspected because of manner of packing’.
Hitchens transferred the bills of lading in respect of the manau cane chairs and canned
pineapples to Allen soon after Colocotronis Angelica departed from Singapore port in
pursuance of Hitchens obligation under their sale of goods contract.
By mistake, the bill of lading in respect of the manau cane chairs stated that 800
chairs were shipped. Of those shipped, 100 had broken legs. The defective chairs had
not been detected because no checks had been made on the chairs prior to issuance of
the bill of lading. Allen paid Hitchens for both the 800 chairs and the canned
pineapples.
The batik cloth sustained significant stains from kerosene during the voyage.
On the way to London, Colocotronis Angelica deviated to assist a ship in distress.

After the vessel had returned to her contractual route, she stranded on a reef because
the second officer was asleep on his watch and 40 tons of the canned pineapples were
damaged. Furthermore, at some point during the voyage rainwater had percolated
into the cargo hold and caused damage to a further 60 tons of the canned pineapples.
Page 62 of 68
It is not yet clear whether this was because of a poorly fitted hatch cover or the result
of the hatch cover not being properly secured after a routine check during the voyage.
However, there is evidence that substandard cans contributed to the damage.
Allen transferred one of the set of bills relating to the pineapples to Dominic and later
transferred another to Timothy under separate sales transactions. Timothy asked
Allen for the full set of bills and felt rather suspicious when Allen persuaded him to
accept just one of the set but nonetheless did so, believing that one was enough to
claim delivery of the goods. Timothy presented his bill of lading when Colocotronis
Angelica arrived in London and obtained delivery of the pineapples. He then
discovered that they were damaged and wishes to sue Singa Lines. Dominic arrived
at the port to collect the pineapples after they had been delivered to Timothy and
wishes to sue Singa Lines.
Advise Singa Lines.
N.B.
(i) Singapore is a Contracting State to Hague-Visby Rules.
(ii) On the deviation point, see Hague-Visby Rules Article IV rule 4
Page 63 of 68
TUTORIAL 4
PAYMENT METHOD: DOCUMENTARY CREDIT
READING
See the reading list for lectures 13 - 15
PREPARATION
INSTRUCTIONS: There are two questions. Attempt Question 2 on your own, but in
due course, you are welcome to approach the teaching staff for guidance on the
solution to the issues involved.
QUESTION 1 (for discussion in the tutorial class)
Henderson Exporters plc of London sold 50 tonnes of United States ‘toasted soya
bean meal’ to Muesli Nestlé GmbH of Hamburg at £6,000 per ton CIF Hamburg, to
be shipped from Southampton during March. Payment is to be made under an
irrevocable letter of credit issued by a Hamburg bank and confirmed by a UK bank,
covering shipment as above and providing for payment against the following shipping
documents:
– Full set of clean on-board bills of lading or ship's delivery order;

– Commercial invoice;
– Policy or certificate of marine insurance;
– Certificate of analysis warranted to contain not less than 44% protein, issued
by the Beanmeal Institute London.
The required letter of credit was duly opened. Henderson shipped the contractual
quantity of soya bean meal to Muesli Nestlé. A week later, Henderson consulted you
upon its knowledge of the following facts:
o The description of the consignment in the bill of lading was ‘50 tonnes of
United States soya bean meal.’
o Despite a certificate of analysis from the Beanmeal Institute showing that the
protein content of the soya bean meal was 46%, it was in fact only 30%.
o The soya bean meal had been received for shipment on 28 March but was not
shipped until 2 April, and the bills of lading nevertheless indicated that
shipment occurred on 28 March.
Page 64 of 68
Henderson believes it has an ironclad right to payment against the documents under
the letter of credit and plans on filing an action to press the claim.
(a) On the assumption that all relevant contracts are governed by English law, discuss
whether Muesli Nestlé can prevent the letter of credit being honoured.
(b) Suppose there is compelling evidence that the seller was merely aware of the false
information in the various documents shortly after the documents came to his
hands, what would be Henderson’s position in relation to its desire to obtain
payment on the letter of credit?
Question 2 (Attempt this question on your own)
Ibro (UK) Limited sells goods to Narasimo of India under a c.i.f. contract providing
for payment by confirmed letter of credit. Confirming Bank advises Ibro that an
irrevocable credit has been opened by Punjabi Bank of India (PBI) in favour of Ibro
and that Standard Bank London (SBL) has been instructed to add its confirmation.
SBL duly complied with the instructions. The letter of credit is governed by the UCP
600 and provides for payment against a clean bill of lading, certificate of insurance
and commercial invoice. In due course Ibro presents to SBL (confirming bank) a set
of documents comprising a certificate of insurance, commercial invoice and a bill of
lading showing that the crates said to contain the designated goods are damaged.
(a) Advise Ibro on its rights against
(i) PBI
(ii) SBL
(iii) Narasimo
(b) Advise SBL as to its rights (if any) against PBI.
 Turn to the next page for Self-Revision Question
Page 65 of 68
SELF-REVISION QUESTION
The following is a past paper question (when the assessment was by way of take
home paper, rather than an exam). It is a good revision question because it
incorporates issues relating to the sale contract, the carriage contract and documentary
credits.
As part of your revision, sit down one day and write as detailed an answer as possible
to this question. This will help you think through all the ‘ins and outs’ of the subject,
which in itself is good revision. It is worth spending some time on it and doing it
properly as this will be very good practice for the exam. You can discuss your
attempted answer with any member of the teaching team or your classmates as
circumstances permit.
QUESTION
In August 2004 Wilcox Exporting, a company specialising in the export of English
food and drink products, made three sale contracts with Fu, a company running
supermarkets in the Far East, all CIF Hong Kong. The first contract was for the sale
of 1,000 kilos of Stilton cheese, the second contract for 3,000 frozen Melton
Mowbray pork pies, and the third contract for 500 crates of Loughborough Wineries
white wine 2001 vintage. To fulfil the sale contracts, Wilcox arranged for the goods
to be shipped from Southampton on board The Scottish Lassie, owned and operated
by Clarkson Carriers. Three clean bills of lading were issued, one for the cheese, one
for the pork pies and one for the wine.
(1) The cheese had been shipped on board The Scottish Lassie in a sealed container
supplied by Wilcox. Fu took delivery of the container at the port in Hong Kong and
had it transported to its warehouse. Five days later the contents of the container were
inspected and the whole consignment of cheese was found to be totally mouldy. An
independent inspector called in by Fu with the agreement of Wilcox concluded that,
even when the cheese had first arrived in Hong Kong, it would have been in a
condition unfit for human consumption. The inspector also concluded that the
condition of the cheese was due to its natural deterioration over the course of time.
Fu had paid £10 per kilo for the cheese. However, by the time of delivery the market
price had risen to £15 per kilo as a result of the publication of a new book of Stilton
cheese recipes by the world-famous cookery writer Delia Jones. The value of the
cheese in its mouldy state was £1 per kilo (for use as animal feed).
(2) The pork pies had been shipped in two sealed containers supplied by Wilcox,
which were especially adapted to carry frozen goods. Once they were loaded onto
The Scottish Lassie, they had been plugged into the ship’s refrigerating system. When
the containers were offloaded at Hong Kong, it was found that the pork pies had
defrosted and, as a result, the whole consignment was ruined. Upon investigation it
was found that the refrigerating unit in one of the containers was faulty, and in respect
of the other container the ship’s refrigerating system itself was faulty. These faults
had apparently been aggravated by a surge in electric current caused by a lightning
strike on the vessel while it had been at sea.
Page 66 of 68
(3) The Hong Kong and Beijing Bank (HKBB) had confirmed a letter of credit in
respect of the wine and paid Wilcox against apparently conforming documents. Fu
had then defaulted under the terms of the credit and HKBB took delivery of the wine
from The Scottish Lassie at Hong Kong. The bank then received a reliable official
information that the bottles in 100 crates of the wine had all been smashed as the
crates had been unloaded. It also discovered that 300 of the crates contained wine of
an inferior 2000 vintage.
Advise Fu of its legal position in respect of parts (1) and (2). Advise HKBB of its
legal position in respect of part (3). (Note that all the bills of lading included an
express clause purporting to exclude the carrier from liability for any negligence on
the part of the crew in the loading/unloading process.)
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Page 67 of 68
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LW3310 (LW3311) Commercial Law

LEICESTER LAW SCHOOL

LW3310 (LW3311) COMMERCIAL LAW 2017-18

Semester Two Handout

This Handout is also available on Blackboard

Teaching Lecture no. & date Lecture Topic

27 2 23 Jan Documentary Sales: CIF Contracts (part 1)

27 3 26 Jan Documentary Sales: CIF Contracts (part 2)

28 4 30 Jan Documentary Sales: CIF Contracts (part 3)

28 5 2 Feb Documentary Sales: FOB Terms (Part 1)

29 6 6 Feb Documentary Sales: FOB Terms (Part 2)

29 7 9 Feb Documentary Sales: FOB Terms (Part 3)

30 8 13 Feb Carriage of Goods by Sea: Introduction (Part 1)

30 9 16 Feb Carriage of Goods by Sea (Part 2)

31 10 20 Feb Carriage of Goods by Sea (Part 3)

31 11 23 Feb Carriage of Goods by Sea (Part 4)

32 12 27 Feb Carriage of Goods by Sea: Concluded

32 13 2 Mar Payment method: Documentary Credit (Part 1)

33 14 6 Mar Payment method: Documentary Credit (Part 2)

33 15 9 Mar Payment method: Documentary Credit (Part 3)

34 16 13 Mar Revision Class (Part 1)

34 17 16 Mar Revision Class (Part 2)

Tutorial Cycle Week Main topic covered

Semester 2 (extracted from a 23 Mar 2017 email to Kath)

LECTURE 1: INTERNATIONAL SALES OF GOODS TRANSACTIONS –

 E Baskind, G Osborne and L Roach, Commercial Law (Oxford University

 E McKendrick, Goode on Commercial Law (4th edn Penguin, London 2010)

3 THE CONTEXT OF “INTERNATIONAL TRADE” IN COMMERCIAL LAW

- How would you describe an “international commercial lawyer”?

- Commercial law is all about supporting the business of trade.

Clive M Schmitthoff, Commercial Law in a Changing Economic Climate, 2nd edition,

Q: Business is central to commercial law – and what is central to business?

A: It’s all about profit... FOLLOW THE MONEY!

Some Key concepts In international trade law

1. Party autonomy (freedom of contract doctrine) and

On ‘commercial sense’, see e.g. Goode on Commercial Law, 8-11; R Goff,

4 SOURCES OF INTERNATIONAL TRADE LAW

C. Statutes: national and regional

5 HARMONISATION IN INTERNATIONAL COMMERCIAL LAW

 commerce by its nature transcends national boundaries – international business

5.1 AGENTS OF HARMONISED COMMERCIAL LAW:

6 THE INTERNATIONAL SALES MATRIX: A MULTIPLICITY OF

DO NOT UNDERESTIMATE THIS POINT:

 Transport document must do the following (achieved by a valid bill of lading):

1. Give control of the goods to carrier and third party

7 A TYPICAL EXPORT TRANSACTION

 Seller must make/supply goods.

LECTURES 2 - 7: DOCUMENTARY SALES AND TRADE TERMS – CIF

 E Baskind, G Osborne, L Roach, Commercial Law (Oxford University Press,

 E McKendrick, Goode on Commercial Law (4th edn Penguin, London 2010)

10 DOCUMENTARY SALES AND TRADE TERMS

10.2 THE TWO KEY OBLIGATIONS

(2) Delivery of Documents

10.3 IMPORTANCE OF THE DOCUMENTS

10.4 THE SHIPPING DOCUMENTS TO BE TRANSFERRED IN A

10.4.2 The commercial invoice

10.5 ENGLISH TRADE TERMS

CIF (Cost, Insurance, Freight) Contracts

10.6 GENERAL READING

 E Baskind, G Osborne, L Roach, Commercial Law (Oxford University Press,