bill of lading

Updated on: 26 Jul 2017

Definition of bill of lading

  1. :  a document issued by a carrier that lists goods being shipped and specifies the terms of their transport

First Known Use of bill of lading

1532


Financial Definition of BILL OF LADING

bill of lading

What It Is

A bill of lading is like a receipt -- it is an acknowledgement of the receipt of goods. A carrier often gives a shipper a bill of lading and an invoice when it is moving goods for the shipper.

How It Works

Company XYZ is in Seattle and it wants to purchase goods from a supplier, Company ABC, in China. The supplier gives the goods to a transatlantic shipping company for transportation to Seattle. It obtains a bill of lading from the transportation company and the goods are transported overseas.

A bill of lading specifies the quantity and type of goods being transported, as well as the goods' final destination and the vessel on which they will travel. In many cases, the bill of lading details whether the recipient (Company XYZ in our example) must pay for the goods upon receipt, whether certain terms must be met before the recipient's bank will secure the shipment with a letter of credit, and/or whether the goods are damaged or in the wrong quantity upon arrival.

Why It Matters

A bill of lading is a contract. It covers the specific terms of the transportation agreement between a shipper and a carrier. A bill of lading is also a receipt, because it proves that the carrier accepted the goods and agreed to take them to their agreed-upon destination. As a result, some bills of lading can be bought, sold or traded when the goods are in transit. In some cases, the recipient of the goods (Company XYZ in our example) can authorize its bank to take title of the goods if it defaults on a payment.


Law Dictionary

bill of lading

bill of lad·ing \-ˈlā-diŋ\
  1. :  a document issued by a carrier that lists goods being shipped and specifies the terms of their transport Editor's note: A bill of lading serves as a receipt for the goods, a contract for the transport of the goods, and a document of title showing that the person in possession of the bill has title to the goods. clean bill of lading :  a bill of lading that does not have any notations written or otherwise marked on it that qualify or amend the bill negotiable bill of lading :  order bill of lading in this entry nonnegotiable bill of lading :  straight bill of lading in this entry order bill of lading :  a bill of lading under which the goods are to be delivered to the person named in the bill or to the named person's order or to the bearer of the bill —called also negotiable bill of lading — compare straight bill of lading in this entry straight bill of lading :  a bill of lading that names the only person to whom the goods may be delivered —called also nonnegotiable bill of lading — compare order bill of lading in this entry


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