The Gazette 1991

JANUARY/FEBRUARY 1991

GAZETTE

Privity and Contracts for the Carriage of Goods by Sea

cannot pass 'unless and until the goods are ascertained'. 9 (F/ynn -v- Mackin & Mahon. 10 ) Much of the cargo shipped on chartered vassels is shipped as an undivided bulk, whether in liquid or dry cargo form. Parts of the bulk will then be sold to a number of different buyers, but no individual purchaser will be able to state which part of the bulk will be his until it is appropriated to him. Property will pass only when the goods are appropriated to the contract. (Spicer-Cowan (Ireland) Ltd -v- Play Print. 11 ) However this will normally only occur when the cargo is unloaded at the end of the voyage. Thus in the case of an undivided bulk cargo, risk will usually pass to the buyer on shipment, but property will not pass until discharge. Therefore, Section 1 of the Bills of Lading Act 1855 will not confer rights on the purchasers of the cargo while the bulk is at sea. It is to be noted that if a bulk cargo is lost at sea the purchasers will be unable to base a case on Section 1 as the goods will never have been appropriated to the contract as it will not have been divided.

I n t r oduc t i on Con t r ac ts f or t he carriage of goods by sea are by nature dynamic. The comme r c i al f r amewo rk in wh i ch they arise involves many parties and d i f f e r ent legal relationships. Such con t r ac ts do not sit easily w i t h t he strict requirements of the doc t r i ne of privity. 1 This uneasy relationship has given rise t o variations and exceptions t o the doctrine of privity that to some extent reflect commercial reality. In wh a t f o l l ows some of these variations w i ll be examined and in particular their consequences for t he cargo-owner vis-a-vis the carrier, his servants, agents and independent con t r ac t o r s . 2

property in the goods. A great change was brought about by the Bills of Lading Act 1855. 7 Section 1 of that Act provides: Every consignee of goods

Imp l i ed con t r ac t ual relations be tween the purchaser of a cargo and the carrier. There is little difficulty in the case of the contract of carriage between the shipper and the carrier. Both parties can sue and be sued by each other. However, when the cargo is sold the shipper will have no interest in taking any action should the goods be subsequently lost or damaged. The purchaser will have no express contract with the carrier since he will not have been party to the original contract of carriage. He must therefore either establish an implied contract or sue in tort. 3 International sales of goods are commonly on F.O.B. or C.I.F. terms or variations thereon. 4 These con- tracts are such that the obligations of the seller in relation to the cargo cease on shipment. The risk is passed to the purchaser. If it is purchased while at sea, C.I.F., as often happens, the risk passes to the purchaser retrospectively from shipment. In the case of successive purchasers, the risk for the com- plete voyage falls on the final pur- chaser 5 (or his insurer under the doctrine of subrogation 6 ). Contractual relations implied by statute At common law contracts were not assignable. Hence a transfer of a bill of lading, with the intention of passing the property in the cargo, did not transfer the rights and liability under the contract of carriage; it merely passed the

By Mui r is O Ceidigh B.A., LL.B.

named in the bill of lading, and every indorsee of a bill of lading to whom property in goods therein mentioned shall pass, upon or by reason of such consignment or indorsement, 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 con t r act contained in the bill of lading had been made with himself. Thus when the risk is passed to the buyer so also will the rights of action against the carrier if this section applies. 8 However this provision has certain limitations which result in it not being applicable in a number of situations. passing of property. The Sale of Goods Act 1893 contains an absolute rule that property in unascertained goods Unascertained goods and the

Muiris O'Ceidigh

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