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ACCA Applied Skills · Corporate and Business Law (Global) · Transportation documents and means of payment

Hartwell Ltd sells goods to Zuberi Co. The contract of carriage names Zuberi Co as consignee in a bill of lading that is marked 'non-negotiable'. Zuberi Co wishes to resell the goods to a third party while they are at sea. Which statement is correct?

A straight, non-negotiable bill names a specific consignee, so it cannot be transferred by endorsement and delivery like an order bill. The carrier should deliver to the named consignee, so Zuberi Co cannot pass title to the goods simply by handing over the bill.

  1. AZuberi Co can pass title by simply endorsing and delivering the bill, as with any bill of lading
  2. BThe bill is a straight bill, so it is not transferable by endorsement and delivery and the carrier should deliver to the named consigneeCorrect
  3. CThe bill becomes negotiable once the goods leave the port of loading
  4. DThe carrier must deliver the goods to whoever holds the bill, regardless of the named consignee

Explanation

A straight bill of lading names a specific consignee and is not negotiable, so endorsement and delivery do not transfer rights to the goods in the way an order bill does. The carrier delivers to the named consignee. Negotiability does not arise merely because the ship has sailed.

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