A Study on the Requirements for Incorporation of Chaterparties into Bills of Lading

Abstract

Purpose The purpose of this paper is to review the current legal position in relation to the incorporation requirements while examining what is necessary for the successful incorporation of the charterparty terms into a bill of lading. Design/Methodology/Approach This thesis was reviewed through an analysis of precedents related to the requirements for the incorporation of charter party terms into a bill of lading. Findings Incorporating the charter party terms into the bill of lading binds the third party despite the lack of knowledge of the terms. Not all charter clauses relate to the relationship between the carrier and tholder. Not all charterparty clauses will be relevant to the relationship between the carrier and holder. Accordingly, the law adopts a strict approach to incorporating non-negotiable charter clauses into the bill of lading. Germane clauses such as freight clauses that are directly related to the contract clauses of the bill of lading are permitted to be incorporated as general incorporation clauses. As for the incorporation of the arbitration clause as an independent contract that is not related to the contents of the bill of lading: in principle, it is incorporated only by the specific incorporation clause to confirm the effect of the incorporation in relation to the wording of the incorporation clause. Research Implications In order to balance the rights of the carrier and the interests of the shipper, a strict approach based on the incorporation requirements according to existing precedents will be adopted for the incorporation of the charter party terms into the bill of lading.