COURSE: BUSINESS LAW TOPIC: LAW OF CARRIAGE OF GOODS BY LAND, SEA & AIR CHAPTERS: 25, 26 & 27 PREPARED

BY: TAHA KHAN & YASIR AHMED MAJU IDs: SP10-MB-0236 & FA10-MB-0122 INSTRUCTOR: MR. MUBASHIR NAEEM SIDDIQUI DATE OF SUBMISSION: APRIL 14, 2012

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TABLE OF CONTENTS
INTRODUCTION....4 CARRIAGE OF GOODS BY LAND....5
1) The Common Carriers Act 1865.5 A) B) C) D) E) F) G) H) 2) Definitions.5 Kinds of Carrier.....6 Features of Common Carrier.......6 Exceptions of Common Carrier...7 Rights of Common Carrier...7 Duties of Common Carrier...9 The Exceptions of Carrier Being Liable for Loss10 Scheduled & Non-Scheduled Goods..11

I II

The Railways Act 1890..11 A) B) C) D) E) Definitions.12 Forwarding Note..12 Railway Receipt (R/R)....12 Duties of Railway Administration..12 Liabilities of Railway Administration12

III

CARRIAGE OF GOODS BY SEA.15

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1) 2)

Contract of Affreightment.15 Charter Party.15 A) B) Kinds of Charter...15 Clauses of Charter Party16

3) 4) 5)

Bill of Lading.16 Delivery of Goods16 Shipowners Lien.16

IV

CARRIAGE OF GOODS BY AIR..17

1) 2) 3) 4) 5) 6) 7) 8) 9) 10) High Contracting Party..17 International Carriage17 Documents of carriage..17 Baggage Check18 Air Waybill Bill (Air Consignment Note)18 Content of Air waybill.19 Right of consignor..20 Right of consignee..20 Liability of the Carrier.20 Claim period for damages.20

V VI

CONCLUSION..21 BIBLIOGRAPHY..22

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INTRODUCTION:
In the commercial life of any country, the need for carrying goods from one place to another cannot be over emphasized. Also, goods are to be moved from one country to another. For these purposes, a contract of carriage is to be entered into. The persons, organizations or associations which carry goods are known as carriers. Goods may be carried by land (including inland waterways), sea or air. Carriage of goods in law, the transportation of goods by land, sea or air. The relevant law governs the rights, responsibilities, liabilities, and immunities of the carrier and of the persons employing the services of the carrier. Accordingly, the law relating to carrying of goods is contained in the following enactments: 1) Carriage by Land 2) Carriage by Sea 3) Carriage by Air

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II

CARRIAGE OF GOODS BY LAND:

There are 2 acts that contain the law relating to carriage of goods by land: 1) The Common Carriers Act 1865 2) The Railways Act 1890 1) The Common Carriers Act 1865:

A) Definitions: It is defined as Any individual, firm or company (other than the Government) engaged in the business of transporting for hire, goods from place to place, by land or inland navigation for every person in discriminately. An individual or business that advertises to the public that it is available for hire to transport people or property in exchange for a fee.

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It provides public transportation of some sort. Specifically, it is any transportation company that has entered into a contract (or that offers itself up as available to enter into a contract) to transport any people, property, or goods across state lines or to transport them around within state lines as a publicly available service. B) Kinds of Carrier: Common Carrier:

A common carrier is legally bound to carry all passengers or freight as long as there is enough space, the fee is paid, and no reasonable grounds to refuse to do so exist. A common carrier that unjustifiably refuses to carry a particular person or cargo may be sued for damages. Private Carrier:

A private carrier is one who does not make general offer but carries goods occasionally. He carries goods for a particular person on some terms mutually agreed upon. He is not bound to carry goods for all indiscriminately. He can accept or reject the offer for carriage of goods. C) Features of Common Carrier: i) Common Carrier: A common carrier may be an individual, a firm or a company excluding Government. ii) For Hire: A common carrier is one who is engaged in the business of transporting goods for hire. iii) Regular Business: A common carrier carries goods as a regular business to earn money. iv) Inland Navigation: The carriage must be made by land or inland navigation (waterways).

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v)

All persons Indiscriminately: A common carrier is bound to carry the goods of any person who offers hires goods for carriage and pays for the service, without any discrimination.

D) Exceptions of Common Carrier: A common carrier can refuse to carry goods in the following circumstances: If the vehicle is already full. If the goods are such nature which he does not carry. If the goods are of dangerous nature and may result in extra ordinary risk If the destination to which the goods are to be transported is not on his normal route. If reasonable charges for the carriage are not paid. If the goods are offered at an unreasonable hour. If the goods are not properly packed. If the consigner refuses to disclose the nature of goods offered for carriage.

E) Rights of Common Carrier: i) Right to get Remuneration: A common carrier is entitled to the agreed charges for His work. If charges have not been agreed, common carrier is entitled to the agreed charges he is entitled to reasonable charges for his services. He can demand payment of hire in advance and if he is Not paid, he may Refuse to carry. ii) Right to Retain: He has a right to retain the goods and refuse delivery thereof until his charges of hire are paid If no charges are paid he can exercise particular lien over the goods. The lien cannot be enforced If the carrier has agreed to give credit. iii) Right to Sue:

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The carrier has a special right regarding the goods delivered to him for carriage. He can file a suit against any person who wrongfully deprives him of goods or Injures Him. iv) Right to Recover Expenses: If some Expenses are incurred due to the safe carriage of goods due to disasters such as flood Then the carrier can recover the expenses from the owner. v) Right to Recover Damages: Carrier can recover damages from the consignor if the goods of dangerous natures are not packed properly due to which some accident happens so the owner is liable to pay all the damages to the carrier or the vehicle. vi) Right to Sell: On refusal to accept delivery of the goods by the consignee, the carrier would be entitled to take such steps as may be deemed reasonable in the circumstances of the case .He can even sell the Goods if the same are of perishable nature or store them in a warehouse if condition of Goods may so allow. vii) Right to give concessions: He has a right to give some concession to any person. However, he cannot charge an unreasonable payment from any customer. viii) Right to refuse to carry Goods: He has a right to refuse to carry the dangerous nature goods. He can also refuse to carry goods which he does not normally carry. ix) Right to Limit his liability:

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A common carrier has a right to limit his liability by Entering into a special contract Under Certain circumstances. F) Duties of Common Carrier: i) Duty to receive Goods: A common carrier is bound to receive for the carriage. All goods offered provided he has Convenience to carry them, and the goods are of a proper kind and the employer is Ready To pay reasonable hire. ii) Duty to carry Goods: A common carrier is bound to carry goods who employ him for the carriage of goods. He can refuse to carry goods under certain circumstances. If he refuses to carry the goods of a person In cases other than those discussed above he is liable for damages. iii) Duty to Follow the route: A common carrier is bound to carry goods delivered to him for the carriage by his usual route. which may or may not be his shortest route. He can however deviate from the Ordinary Route if that becomes necessary for the safe Carriage of goods. iv) Duty to Deliver the goods: The carrier must deliver the goods at the agreed time or where no time is fixed, within a reasonable time .He should use reasonable diligence to avoid delay. He is not responsible For the causes of Delay beyond his control. v) Duty to carry Goods Safely: He must carry goods within reasonable care. It is the duty of Common carrier to ensure their safety during the carriage and until delivery He is responsible for owner for safe and Sound Delivery. vi) Duty to provide suitable carrier:

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It is also his Duty to Load the goods properly in the vehicle so that the goods may be carried to the destination safely. vii) Duty to Deliver at proper Place: He must deliver the goods to the consignee. He is not bound to deliver the goods at the house of the consignee unless an agreement to that affect has been made if no place Is mentioned he must deliver the goods at the customary place of the consignment. viii) Duty to deliver to Right person: It is the duty of a common carrier to use reasonable care to deliver the goods to the right Person In accordance with the usual course of business. ix) Duty to obey instructions: When the goods are in transit the carrier is bound to obey the instructions of the consignor as to alteration of delivery. G) The Exceptions of Carrier Being Liable for Loss (Under the English Law): i) The Act of God: The common carrier is not liable due to loss incurred by natural disasters like Earthquake, floods etc. ii) Enemies of the state: The carrier is not liable of loss Caused by enemies of a state in situations such as war like war between India and Pakistan. iii) Inherent Defects: The carrier is not liable for losses arising from inherent defects such as disease in animal and evaporation of liquid products. iv) Defective Packing:

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The Carrier is not liable if the loss arise due to defective packing of goods. v) Fraud or Fault of consignor: If the consignor is guilty of fraud the carrier is not liable for any loss or damage incurred to The product. (H) Scheduled & Non-Scheduled Goods:

Goods are classified into scheduled and non-scheduled categories. Goods of high value are termed as scheduled goods. For e.g. gold coins, precious stones, currency notes, work of art, articles of ivory or sandalwood. etc. The carrier can charge extra for carrying such costly articles provided their value exceeds Rs. 100 and will be liable for loss or damage only if the value and description of goods has been disclosed by the consignor in advance or if the loss is due to a criminal act of the carrier, his agents or servants. Other types of goods are called non-scheduled goods. 2) The Railways Act 1890:

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A) Definitions: According to Section 3 of the Railways Act 1890 the word Railway means a railway or any portion of a railway for the public carriage of passengers, animals or goods. Pakistan Railways (reporting mark PR) is a national state-owned rail transport service of Pakistan, head-quartered in Lahore. It is administered by the federal government under the Ministry of Railways. PR provides an important mode of transportation throughout Pakistan. It is commonly referred to as the "life line of the country", by aiding in large-scale movement of people and freight throughout Pakistan. B) Forwarding Note: Every consignor of goods or animals has to prepare a note called forwarding note or consignment note. It contains the description of the goods, number of packages, weight, names and addresses of the consignor and the consignee and the liability of railway and freight paid and freight to pay. C) Railway Receipt (R/R): On submission of the forwarding note to the railway parcel office the consignor is given a receipt acknowledging the goods with an undertaking to carry them in accordance with the terms and conditions. D) Duties of Railway Administration: i) ii) iii) Duty to provide facility Duty to treat equally Duty to follow directions

E) Liabilities of Railway Administration: i) Liability at railway risk:

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If the consignment is at railways risk the railway is responsible for any loss, destruction in transit arises except Act of God, Act of war, Fire explosion and any unforeseen risk. ii) Liability at owners risk: If the goods are carried by railway at owners risk it is not liable for any loss or damage of goods unless its proved that such loss was due to negligence or mishandling by its servant. iii) Liability for delay or detention in transit: A railway is not responsible for loss, destruction, damage or deterioration or animals or goods caused by delay or detention unless the proved negligence or misconduct of railway. iv) Liability for wrong delivery: Where railway delivers the goods or animals in a good faith to the person who produces the original railway receipt. v) Liability after Termination of Transit: Transit terminates on the expiry of the free time allowed for uploading the good. The liability of railway administration during seven days after the termination of transit is the same as that of a bailey under contract act. vi) Liability as a Carrier of Animals: In case of animals, the liability of railway administration for loss or damage etc. shall not exceed: Elephant Rs.50,000, Horned cattle or camel Rs.15,000, Horse Rs.10,000, Dog, Donkey, Goat or Bird Rs.1000. vii) Liability in carriage of passengers luggage: Railway is not liable for the personal luggage of a passenger which has not been booked and the passenger takes with him at his own risk.

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viii)

Liability in article of special value: When the package or parcel of which the value has been declared the compensation for loss shall not exceed the values so declared.

ix)

Liability in case of accident of passenger: If a passenger dies or is injured as a result of railway accident, the railway shall be liable to pay Rs.100000 to the heirs of deceased and Rs.10000 to the injured passenger.

x)

Liability in case of accident of a person other than passenger: The railway shall be liable for to pay Rs100000 to heirs of the deceased and Rs.10000 to the injured. If the accident is proved to proved to have occurred due to railways negligence

xi)

Responsibility in case of goods falsely described: Railway shall not be responsible for the loss, destruction or deterioration of any goods which have been falsely declared.

xii)

Notification of claim: A person shall not been title to a refund of an overcharge in respect of animals or goods carried by railway or to compensation for the loss, destruction or deterioration of animals or goods unless his claim has been made in writing within six months from the date of delivery of the animals or goods.

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III

CARRIAGE OF GOODS BY SEA:

The law relating to the carriage of goods by sea is contained in the Bill of Lading Act 1856 & the Carriage of Goods by Sea Act 1925. 1) Contract of Affreightment: A contract of carriage of goods by sea is called a contract of affreightment and the consideration for carriage is called the freight. A contact of affreightment may take the form of a Charter Party where an entire ship is hired, or a Bill of Lading, where the goods are to be carried in a generalship which can be used for this purpose by any person. In both these contracts, the ship owner as the carrier undertakes the responsibility of carrying the goods of the consignor safely and securely to the destination. 2) Charter Party: A charter party is a contract providing for a hiring of a whole ship. Its terms may amount to a leasing of the ship, when the master and the crew of the ship become the servants of the charterer. A charter party may be for a particular period, or for a particular voyage. In the former case it is called a time charter party and in the latter case, a voyage charter party has no specific form, the form varies from trade to trade depending on the customs of the trade. A) Kinds of Charter Party: i) ii) iii) Voyage Charter Party Time Charter Party Charter by demise

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B) Clauses of Charter Party: i) ii) iii) iv) v) vi) vii) viii) ix) x) Names of Parties & Ship Class of Charter Party & Ship Now at / Current Location Seaworthiness & Fitness Port of Loading Full & Complete Cargo Law of Merchandise Payment of Freight Ship owners Lien Cesser Clause

3) Bill of Lading: A bill of lading is issued when goods are delivered for carriage to a general ship, which offers to carry them. The position of the owner of a general ship is that of a common carrier. A bill of lading may be used even when a ship is chartered. A bill of lading acknowledges the receipt of goods is a document of title to the goods and is also a contract of carriage of goods. A bill of lading, as a document of title to the goods, can be transferred to another person by endorsement and delivery. This characteristic of a bill of lading resembles that of a negotiable instrument, but in the strict legal and technical sense it is not a negotiable instrument. It may be said that it is negotiable only in the popular sense. 4) Delivery of Goods: The prime duty and obligation of a carrier by sea is to deliver the goods to the holder of the bill of lading, provided proper payment of freight has been made. Bill of lading is commonly drawn in a set of three copies, one of which is sent to the consignee, the second is for the ship's master and the consignor retains the third. 5) Ship owners Lien: In the event of non-payment of freight and other charges, the ship-owner has a right of lien on the cargo. He is thus entitled to retain the goods in his possession until the dues

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are paid. His lien exists independently of any express agreement in this regards, but ceases upon the delivery of goods.

IV

CARRIAGE OF GOODS BY AIR:

The law relating to the carriage of goods by air is contained in the Carriage by Air Act 1934. It contains 2 schedules. The Schedule 1 contains the Warsaw Convention Rules. The Schedule 2 covers the Hague Protocol. 1) High contracting party: All Governments who have signed the Warsaw Convention rules are known as HCP. 2) International carriage: International carriage means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transshipment, are situated either within the territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate or authority of another Power, even though that Power is not a party to this Convention. A carriage without such an agreed stopping place between territories subject to the sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to be international for the purposes of this Convention. 3) Documents of carriage:

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A) Passenger Ticket B) Luggage Ticket 4) Baggage Check: For the carriage of baggage, other than small personal objects of which the passenger takes charge himself, the carrier must deliver a baggage check. The baggage check shall be made out in duplicate, one part for the passenger and the other part for the carrier. The baggage check shall contain the following particulars: A) B) C) D) E) The place and date of issue; The place of departure and of destination; The name and address of the carrier or carriers; The number of the passenger ticket; A statement that delivery of the baggage will be made to the bearer of the baggage check.

5)

Air Waybill Bill (Air Consignment Note): Every carrier of cargo has the right to require the consignor to make out and hand over to him a document called an air way bill; every consignor has the right to require the carrier to accept this document. A) The air waybill shall be made out by the consignor in three original parts and be handed over with the cargo. The first part shall be marked for the carrier, and shall be signed by the consignor. The second part shall be marked for the consignee; it shall be signed by the consignor and by the carrier and shall accompany the cargo. The third part shall be signed by the carrier and handed by him to the consignor after the cargo has been accepted. The carrier shall sign on acceptance of the cargo. The signature of the carrier may be stamped; that of the consignor may be printed or stamped.

B)

C) D)

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E)

If, at the request of the consignor, the carrier makes out the air waybill, he shall be deemed, subject to proof to the contrary, to have done so on behalf of the consignor. The carrier of cargo has the right to require the consignor to make out separate air waybills when there is more than one package.

6) Content of Air waybill: The air waybill shall contain the following particulars: A) B) C) The place and date of its execution; The place of departure and of destination; The agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and that if he exercises that right the alteration shall not have the effect of depriving the carriage of its international character; The name and address of the consignor; The name and address of the first carrier; The name and address of the consignee, if the case so requires; The nature of the cargo; The number of the packages, the method of packing and the particular marks or numbers upon them; The weight, the quantity and the volume or dimensions of the cargo; The apparent condition of the cargo and of the packing; The freight, if it has been agreed upon, the date and place of payment, and the person who is to pay it; If the cargo is sent for payment on delivery, the price of the cargo, and, if the case so requires, the amount of the expenses incurred; The amount of the value declared

D) E) F) G) H)

I) J) K)

L)

M)

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N) O) P)

The number of parts of the air waybill The documents handed to the carrier to accompany the air waybill The time fixed for the completion of the carriage and a brief note of the route to be followed, if these matters have been agreed upon; A statement that the carriage is subject to the rules relating to liability established by this Convention.

Q)

7) Right of consignor: Subject to his liability to carry out all his obligations under the contract of carriage, the consignor has the right to dispose of the cargo by withdrawing it at the aerodrome of departure or destination, or by stopping it in the course of the journey on any landing, or by calling for it to be delivered at the place of destination or in the course of the journey to a person other than the consignee named in the air waybill. 8) Rights of consignee: The consignee is entitled, on arrival of the cargo at the place of destination, to require the carrier to hand over to him the air waybill and to deliver the cargo to him, on payment of the charges due and on complying with the conditions of carriage set out in the air waybill. 9) Liability of the Carrier: The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air. 10) Claim period for damages: In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within three days from the date of receipt in the case of baggage and seven days from the date of receipt in the
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case of cargo. In the case of delay the complaint must be made at the latest within fourteen days from the date on which the baggage or cargo has been placed at his disposal.

CONCLUSION:
To conclude, I can elaborate that the Modes of transportation of land, sea air are the backbone of any economy, the carriage acts covers all the aspects relating to them, the carriage of goods by land is quicker for short journeys and can provide door-to-door service, it is reliable as goods are under direct control of drivers, it is relatively cheap over short distances and it is relatively safe for goods since there is little handling. The carriage of goods by air provides High Speed, Quick Service, No Infrastructure Investment, Easy Access, No Physical Barrier and Natural Route. Transportation over sea is generally less expensive and more direct. Furthermore, marine transport tends to be more energy efficient and safer than rail or road transport. It is Ideal for transporting heavy and bulky goods and Suitable for products with long lead times. Huge amounts of cargo can be transported at one time. Like 10,000 tons or more. The number of people required to run the ship is very low- maybe 15 to 20. Large distances can be covered easily with low fuel costs.

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BIBLIOGRAPHY:
Business Law Book, Revised Edition 2011. Bardi, Edward; John Coyle and Robert Novack (2006). Management of Transportation. Thomson South-Western. ISBN 0-324-31443. http://www.britannica.com/EBchecked/topic/96962/carriage-of-goods http://wiki.answers.com/Q/What_are_the_advantages_of_land_transportation http://www.publishyourarticles.org/knowledge-hub/business-studies/what-are-theadvantages-and-disadvantages-of-air-transport.html http://www.iimm.org/knowledge_bank/10_law-of-carriage-of-goods.htm Stopford, Martin (1997). Maritime Economics. London: Routledge. ISBN 0-415-15310-7. http://wiki.answers.com/Q/Why_would_transporting_goods_by_sea_have_been_prefera ble_to_transportation_over_land#ixzz1ryEP4USd

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http://ekool.tktk.ee/failid/H/transport_E/advantages_and_disadvantages_of_sea_transp ort.html http://www.prlog.org/10010673-contracts-of-carriage-of-goods-by-land-and-air.html http://www.admiraltylaw.com/carriage.htm http://answers.yahoo.com/question/index?qid=20090719052332AA4wc3k http://www.na.gov.pk/uploads/documents/1302515026_280.pdf http://en.wikipedia.org/wiki/Carriage_of_Goods_by_Sea_Act http://www.lawandsea.net/COG/1_index_COG.html

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