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What is a claused bill of lading: All you need to know about its meaning and format

A claused bill of lading states that the goods delivered were not as per the initial contract between the parties involved. Learn more about its process and example in this blog.

In the process of exports, Bill of Lading (BOL) is an important legal document that details the journey of a particular shipment. There are several types of bills of lading, which are categorized according to its uses. A claused bill of lading is one that includes explicit terms and conditions for the shipment of commodities.

When a Bill of Lading has clauses, it indicates that there was either a shortage or damage to the shipped goods. If the cargo documented by the Bill of Lading is ‘claused’, it signifies that the goods were not delivered as per the initial contract¹.

How does a claused bill of lading work?

A bill of lading is a legal document which is used to track the shipment, and when it is claused, it signifies that whatever was promised was not delivered by the legal bill of lading. In such a scenario, for these specific kinds of bills of lading, a Claused bill of lading is issued, which shows a shortfall or mentions the damages in the delivered goods¹.

How to avoid being issued a claused bill of lading?

It is the responsibility of the exporter to plan shipment and logistics in a manner that does not impact the delivery conditions, thus, avoiding a Claused Bill of Lading. Let’s consider this example to better understand the concept. If due to a certain situation, an exporter can only ship 500 goods this month despite the BOL requiring the delivery of 1,000 goods, it is best for the exporter to inform the importer before shipment. Then, when the buyer receives the items, there will not be any disagreements in this regard. To avoid risk of damage or loss, it is important for the exporter to work with reputable shipping companies².

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Format of a claused bill of lading

The format of a Bill of Lading and a Claused Bill of Lading is almost the same. The only difference is, in a Claused Bill of Lading, certain clauses are added to cover the various situations that may occur during shipping and to denote that the delivered goods either have not all arrived or have arrived damaged in some way.

Clauses of a claused bill of lading

A claused bill of lading denotes certain discrepancies in the quantity and quality of the shipped goods. It also shows apparent damages in the packaging of goods. Certain clauses are added by the carrier to denote the condition of the damaged goods².

Specific clauses

Cargo wet, cargo rotting, some damaged packages

Broad clauses

Condition unknown, quality unknown

The addition of clauses is an acceptable practice as long as the booking party and the carrier agree on the claused bill of lading.

Difference between Bill of Lading and Claused Bill of Lading

In all export logistic processes, a Bill of Lading is issued – it is a contract or proof of shipment including details of the parties involved and terms and conditions. On the other hand, a Claused Bill of Lading is issued by the importer or receiver when there is damage or loss of goods that have been delivered. A BOL is also used by the shipping firm at the time of delivery, which is signed off by the receiver upon delivery.

Thus, it is important for an exporter to understand logistics and plan shipment according to the goods being sold. With e-commerce exports, obtaining necessary documents, licenses and shipping goods has become simpler with support at every step.

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More blogs on bills of lading

1. What is a surrender bill of lading?

2. What is a multimodal bill of lading?

3. What is an order bill of lading?

4. What is a bill of lading?

5. What is a through bill of lading?

6. House bill of lading: All you need to know about its format and benefits

7. Ocean bill of lading: All you need to know about its types and format

8. What is a clean bill of lading: All you need to know about its meaning and format

9. Master bill of lading vs house bill of lading: Everything you need to know

10. Straight bill of lading: Guide to its meaning and format

11. What is a switch bill of lading: Guide to its meaning and uses

12. What is an inland bill of lading?

Frequently Asked Questions

What is the difference between a Clean Bill of Lading and a Claused Bill of Lading?

Standard shipped-on-board notation appears on a Clean Bill of Lading (BOL). A Claused bill of lading is a type of bill of lading that shows that the bill of lading did not provide delivery as stated in the contract.

Is a Claused Bill of Lading accepted by the bank of LC negotiation?

No, a bank does not accept a Bill of Lading with clauses for the purposes of negotiating or discounting a Letter of Credit unless the provisions have been removed.

What is the difference between a claused, unclean, dirty, and foul Bill of Lading?

There is no difference. These are different names for a claused Bill of Lading.

Is a claused Bill of Lading preferred for shipment?

No. A Clean Bill of Lading is preferred for shipment. When a BOL is not as per the receiver’s expectations, like when the cargo is damaged or missing in quantity, a Claused BOL is issued. This can result in a financial loss for the exporter and it is primarily the exporter's responsibility to prevent a claused bill of lading.

Published on October 29, 2022.

Sources:
1. https://www.investopedia.com/terms/c/claused-bill-of-lading.asp
2. https://maxfreights.com/what-is-a-claused-bill-of-lading/
3. https://www.globalnegotiator.com/international-trade/dictionary/claused-bill-lading/
4. https://howtoexportimport.com/Unclean-Bill-of-Lading-Claused-bill-of-lading-foul-49.aspx

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