ACCA Applied Skills · Corporate and Business Law (Global) · Transportation documents and means of payment
A buyer under a documentary credit receives a bill of lading stating 'shipped on board' but the carrier has also stamped it 'two cartons crushed, packaging torn'. How is this bill of lading best described?
The bill is a claused, or dirty, bill of lading because the carrier has noted damage to the goods or packaging. A clean bill would record apparent good order and condition, and straight refers to a named consignee, not the goods' condition.
- AA claused (dirty) bill of ladingCorrect
- BA clean bill of lading
- CA straight bill of lading
Explanation
A clean bill records that goods were received in apparent good order and condition. Where the carrier notes defects such as damaged packaging, the bill is claused or dirty. Banks usually refuse a claused bill under a documentary credit. A straight bill concerns the named consignee, not the condition of goods.
Did you get it right without looking?
One question tells you little. A timed set on Transportation documents and means of payment shows your real accuracy, how long you take and where you lose marks.
More Transportation documents and means of payment questions
- Lumina Ltd in Country A sells machinery to Orbis Co in Country B. Payment is by irrevocable documentary credit issued by Orbis Co's bank (th…
- Orrin Co ships goods under a bill of lading made out 'to the order of Pelham Bank'. Pelham Bank wants to pass the right to collect the goods…
- Dara in Country A draws a written, signed, unconditional order addressed to Bexo Ltd in Country B, telling Bexo to pay 50,000 to Calum or to…
- Orlo Ltd sells goods to Pravin Co on CIF Rotterdam terms (Incoterms 2020). The goods are loaded on board at the port of shipment on 3 May an…
- A seller holds a bill of exchange accepted by a buyer, payable in 60 days. The seller needs cash now and sells the bill to its bank for less…
- Kestrel Ltd, an exporter, is concerned about the credit risk of the foreign issuing bank. It asks for a confirmed irrevocable credit. What d…