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

Tolan Co ships machinery to Keswick Ltd under a sea waybill naming Keswick Ltd as consignee. During the voyage Keswick Ltd wants to sell the goods to Ormond Co. Which statement is correct?

Keswick Ltd cannot pass title by handing over the waybill. A sea waybill is non-negotiable and not a document of title, so goods are delivered to the named consignee. Endorsement or a clean notation does not change that.

  1. AKeswick Ltd cannot transfer title by handing over the waybill, because a sea waybill is not a document of titleCorrect
  2. BKeswick Ltd can transfer title by endorsing the waybill in blank
  3. CKeswick Ltd can transfer title only if the carrier has first signed the waybill as clean

Explanation

A sea waybill is a receipt and evidence of the contract of carriage, but it is non-negotiable and is not a document of title. Delivery is made to the named consignee on proof of identity, so handing over the waybill transfers nothing. Whether it is clean is irrelevant to negotiability.

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