No Plagiarism: Read Materials In Chapter 11 In The Text

No Plagiarismplease Read Materials In Chapter 11 In The Textbook And

Read the materials in Chapter 11 of the textbook along with outside resources to answer specific questions related to international shipping terms, delivery responsibilities, and bills of lading. The assignment involves analyzing scenarios involving FOB and FAS shipping terms, as well as examining the liability issues arising from discrepancies in shipped quantities documented by bills of lading.

Paper For Above instruction

Introduction

The intricacies of international trade law heavily depend on the precise interpretation of shipping terms such as FOB (Free on Board) and FAS (Free Alongside Ship), as well as the legal implications of bills of lading. These elements determine when ownership and responsibility transfer from seller to buyer, and they influence liability in cases of mishaps or discrepancies. This essay systematically examines three specific scenarios to elucidate these complex issues within international business law.

Scenario 1: Liability of Seller under FOB Terms

In the first scenario, a seller agreed to ship 10,000 tons of potatoes FOB Tacoma, Washington, with delivery to be made at pier 7 in Tacoma. The buyer designated the SS Russet as the vessel for delivery. The seller fulfilled their obligation by delivering the potatoes to the pier, but complications arose when the ship was not present at the designated pier at the scheduled time. As a result, the potatoes had to be transferred from a lighter at a mooring buoy, which involved attaching containers via a cable that eventually snapped, causing the potatoes to fall into the sea.

Under FOB terms, the seller's responsibilities are generally filled once the goods are loaded onto the vessel at the designated port. Legal principles indicate that once the seller delivers the goods onto the ship, their obligation is complete, and risk transfers to the buyer. However, in this case, the manner of delivery—using a lighter and the subsequent mishap—raises the question of liability. Because the seller had fulfilled their obligation by delivering the potatoes onto the vessel (the Russet), the primary responsibility for mishaps that occur during loading or transfer generally shifts to the buyer once the goods are on board. Nonetheless, if the seller was negligent in ensuring proper loading procedures or in arranging the transfer, they could be held liable.

In this case, the failure of the cable and the resulting damage occurred during the transfer operation, which the seller arranged. Therefore, the seller could be liable due to negligence or improper handling during transfer, especially if it is established that they failed to ensure proper securing procedures. If, however, the transfer was conducted properly and the mishap was purely accidental, then liability might shift to the carrier or the buyer, depending on the terms of the contract and the nature of the incident.

Scenario 2: Liability under FAS Terms

Suppose the same scenario occurred, but the contract specified FAS Tacoma instead of FOB. Under FAS terms, the seller's obligation ends once the goods are placed alongside the ship at the specified port of shipment, here Tacoma. This means the seller’s responsibility is limited to bringing the goods to the port and placing them adjacent to the vessel. The risk and responsibility for loading the goods onto the vessel then transfer to the buyer once the goods are alongside the ship.

In this context, the seller's liability would be considerably reduced once they have placed the potatoes alongside the vessel. The mishap involving the cable, the fall of potatoes into the sea, and the capsizing of the lighter would generally fall under the buyer’s risk once the goods are delivered alongside the ship, unless the seller’s actions directly contributed to the mishap. If the mishap occurred during the process of placing the goods alongside the vessel, and the seller was negligent, liability might still be attributable to the seller. Otherwise, the risk would typically pass to the buyer, who is responsible for loading and transferring the goods onto the vessel.

Effect of the Bill of Lading

The third issue pertains to the role of the bill of lading in this transfer of responsibility. A bill of lading serves as a document of title, evidence of contract of carriage, and receipt of goods. In scenarios where a bill of lading is issued, the document's terms govern the rights and obligations of the parties.

If, in the above case, the seller or carrier issues a bill of lading indicating full shipment and receipt of the potatoes, then the bill becomes evidence of the shipment. If the bill of lading describes the cargo accurately but does not specify liability for damages during transfer, liability may be limited to the terms outlined in the bill. For instance, a "clean" bill of lading suggests the cargo was received in good condition, whereas a "foul" or "claused" bill indicates damages or discrepancies.

In the given scenario, because the potatoes fell overboard during handling and transfer, the bill of lading may hold the carrier responsible if it is a "foul" bill or if negligence is established. However, if the bill explicitly limits liability or shifts responsibility, that would influence the outcome. The buyer's claim for damages depends on the terms of the bill and legal doctrines related to transfer of risk and liability.

Scenario 3: Liability for Quantity Discrepancies in Bill of Lading

The third scenario involves a sale of 5,000 bales of cotton FOB Bombay, with the cotton transported to Liverpool via the SS Allthumbs. Due to counting errors, only 4,987 bales were loaded, yet the bill of lading shows 5,000 bales. The bill was signed over to the buyer as proof of shipment, and upon arrival, the missing bales' value is contested.

The core issue is whether the ship is liable for the discrepancy in the quantity documented versus the actual cargo loaded. Generally, a bill of lading is considered an operative document representing the actual condition of the cargo at loading. If the bill indicates 5,000 bales, but only 4,987 are loaded, this discrepancy could imply the bill is a "foul" bill, or it might be a "clean" bill with an error.

Under maritime law and Incoterms, the carrier's liability is typically limited once the cargo is loaded and documented correctly unless gross negligence or fraud is involved. Since the error arose from the ship’s crew or the seller’s miscount, the liability can hinge on whether the bill of lading accurately reflects the cargo. If the bill was signed in good faith, the buyer might have limited recourse against the carrier because the carrier's obligation is to carry the cargo as described in the bill.

If Seller admits the error was not the ship’s fault but their own, it could influence liability. In such cases, the seller may bear responsibility for misrepresenting or miscounting at the point of loading. Ultimately, the shipment’s liability for the missing bales typically rests with the seller, especially if the error was at the loading stage, provided the carrier's conduct was proper and the bill accurately reflects what was loaded.

Conclusion

Understanding the distinctions between FOB and FAS shipping terms is crucial in allocating responsibility and liability during international transactions. While FOB transfers risk once the goods are on board, FAS limits the seller’s responsibility to placing goods alongside the vessel. Bills of lading serve as vital documents that codify the terms of carriage and receipt, significantly affecting liability in cases of damage or discrepancies. Lastly, the accuracy of cargo quantity recorded on bills of lading has substantial legal implications, especially regarding liability for shortages or overstatement. International business law continuously evolves to address these complex, real-world scenarios, emphasizing the importance of clear contractual terms and comprehensive documentation.

References

• Miller, R. (2018). International Commercial Law: Text, Cases, and Materials. Routledge.
• Schmitthoff, C. M. (2019). Carriage of Goods by Sea (4th Ed.). Routledge.
• International Chamber of Commerce. (2010). Incoterms® 2010. ICC Publishing.
• Sweeney, M. J. (2020). Maritime Law. Oxford University Press.
• Clarke, R. G., & Adams, D. (2017). International Trade Law. Cambridge University Press.
• Williams, J. (2019). Bills of Lading and International Commerce. Journal of Maritime Law, 45(3), 251-273.
• Johnson, L. (2021). The Law of International Trade and Contracts. Pearson Education.
• Gaskell, N. (2017). Shipping Law: Cases and Materials. Routledge.
• United Nations Commission on International Trade Law (UNCITRAL). (2019). UNCITRAL Model Law on International Commercial Conciliation.
• Fletcher, D. (2016). The Law of Carriage of Goods by Sea. Oxford University Press.