Failure to remove clause

Failure to properly clause bills of lading can cause many different problems. One example of this is a failure to make it clear that cargo is not loaded under deck. Ten containers of expensive electronic equipment were shipped from the USA to Australia. The bills of lading were prepared by the shipper’s agent, and each bill of lading was claused “below deck stowage required”. The bills of lading were then sent to the line’s agent for checking and signature. The line did not guarantee under deck stowage and the agent was instructed to delete the clause “below deck stowage required” before signing the bill of lading. During heavy weather eight containers were lost overboard, one of which belonged to the shipper of the electronic equipment. It subsequently emerged that the agent had failed to delete the clause requiring under deck stowage. The line faced a claim in excess of USD500,000 from cargo insurers which, but for the agent’s error, could have been settled for USD500 under the package limitation provided for in the US Carriage of Goods by Sea Act.

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