Legal Definitions - foul bill of lading

A foul bill of lading (also known as a claused or dirty bill of lading) is a document issued by a carrier (such as a shipping company) to a shipper (the sender of goods) that contains a notation indicating that the goods received for shipment were not in apparent good order and condition, or that there was a discrepancy with the shipment at the time of loading. This is in contrast to a "clean bill of lading," which states that the goods were received without any visible damage or issues.

The carrier makes these notations to protect themselves from liability for pre-existing damage or shortages. A foul bill of lading signals to the recipient and any financial institutions involved (like banks processing payment via a letter of credit) that there were problems with the cargo before or during the loading process.

Here are some examples:

• Example 1: Visible Damage to Packaging

  A furniture manufacturer ships a consignment of 50 wooden crates of unassembled chairs. When the shipping company's crew loads the cargo onto the vessel, they notice that 10 of the crates have visible dents and scuff marks, and one crate has a significant tear in its side. The carrier's representative notes on the bill of lading: "10 crates visibly dented, 1 crate torn on side." This notation makes it a foul bill of lading, indicating that the damage was present before the goods were fully under the carrier's responsibility for transit.

• Example 2: Quantity Discrepancy

  A textile company prepares a shipment declared as 100 bales of raw cotton. When the carrier's loading team counts the bales as they are brought onto the truck or ship, they only find 98 bales. The carrier issues a bill of lading with the remark: "Received 98 bales only, short 2 bales as per shipper's declaration." This discrepancy noted on the bill of lading makes it a foul bill, highlighting that the quantity received by the carrier did not match the quantity declared by the shipper.

• Example 3: Inadequate Packaging

  A company is shipping delicate electronic components that require specific protective packaging for international transit. The bill of lading prepared by the shipper states that the goods are "packed in reinforced, waterproof containers." However, upon inspection during loading, the carrier observes that several containers are made of standard cardboard, show signs of moisture absorption, and appear insufficiently secured for a long sea voyage. The carrier adds a clause to the bill of lading: "Packaging on 5 containers appears inadequate for sea transit; moisture evident on exterior." This observation, recorded on the bill of lading, renders it foul, as it points out a potential issue with the goods' protection that could lead to damage during transport.