Sign Missouri Banking Bill Of Lading Safe

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what's up guys Jack Shelton here in this video we'll be talking about negotiable bills of lading alright so we've talked about bills of lading in a few other videos but just as a refresher a bill of lading is a document that the carrier issues to the shipper once the carrier has received the cargo and it serves three functions first it is a receipt it is evidence that the carrier has received the cargo in a particular condition so if the recipient of the cargo after delivery notices that the cargo has been damaged they're going to look at the bill of lading and see if the bill of lading notes that there's any damage when the carrier received it if the carrier doesn't note any damage then the person who receives the cargo might have a claim against the carrier next the bill of lading serves as the contract of carriage between the shipper and the carrier now this is only true in common carriage so like the liner trade in private carriage usually a charter party governs the contract of carriage between the shipper and the carrier third when a bill of lading is negotiable it serves as a document of title now we call it a document of title that's a little bit of a misnomer because what it really represents is a right to receive the cargo from the carrier it does not necessarily confer ownership ownership is usually conferred by the sales contract so the Bill of Lading does not confer ownership when we call it a document of title it only confers a right to receive the cargo from the carrier okay let's talk about negotiability now negotiability seems like a foreign concept but I promise you that everyone watching this video has seen this before a pretty close analogy is with a personal check all right so what does a personal check represent it represents a right to receive cash from a bank when an account holder to bank uses one of their cheques and they fill it out and they sign it and hand it over to a person that is called issuance of a check now note that on every check you've ever seen there's this magical language on there that says pay to the order of it is this magical language on the check that makes it check negotiable all right let's explain what negotiation means so imagine that somebody writes me a check for $100 and it says pay to the order of Jack Shelton and then they hand it to me what I can do is I can sign the back of it I can endorse the back of it and I can for example just sign the back of it and I can take it to the bank and cash it or instead I can negotiate it to somebody else so I can sign the back of it and I can write pay to Bob and then I can hand it to Bob and then Bob has the right to go to a bank and cash it endorsing the back of the check and then delivering it to Bob is called negotiation of the cheque now there's different ways I can negotiate it I can just sign it in which case that's called a blank endorsement and then I can hand it to anybody so I can just write my name Jack Shelton on the back of it and I can hand it to anybody and then whoever has it can deposit it or cash it at that point we call it a bearer instrument because anybody who bears it anybody who's holding on to it can take it to the bank alternatively I can write to Bob which is a specific endorsement that means that only Bob can go and cash it or I can write on the back of it to the order of Bob and then I sign it and then because I've included that magic language it still is a negotiable cheque so Bob can then endorse it on the back and endorse it to another person who then would have the right to cash it bills of lading work very similarly okay here is the top half of a negotiable Bill of Lading what does it represent just like a check represents the right to receive cash from a bank a negotiable Bill of Lading represents a right to receive cargo from the carrier just like you couldn't issue a check we issue a bill of lading and when it's issued to order it becomes negotiable look at that magic language to the order of Tennessee imports Inc I've made up the name Tennessee imports ink I don't know if that's an actual company or not if it is I'm sorry for using your name all right let's look at how a bill of lading is negotiated again just like with the cheque you just endorsed it on the back and hand it over to a new person and that's how you negotiate it let's look at two different bills of lading and how they might be filled out this is the exact same bill of lading with a minor change over here on the Left we say to the order of Tennessee imports Inc this makes it a negotiable bill of lading over here on the right we have just Tennessee imports Hank and it does not say to the order this is a non negotiable bill of lading that means that this cargo can only be delivered to Tennessee imports Inc and Tennessee importance Inc cannot endorse it on the back deliver it to another person and thereby negotiated so let's get into the details here a little bit the bill of lading will be negotiable if the consign e box has any of the following magical language to the order of somebody's name this results in what we call an order bill this is the normal way we do negotiable bills of lading there's another way you can do the same thing you can say to person's name or his assigns this also results in an order bill this is very unusual I've never actually seen anybody do this but it's a possibility also this is very unusual you can just put in the consign he box to Bearer this results in what's called a bearer bill and that means that anybody who has the original Bill of Lading regardless of whether it's been negotiated or endorsed over to them anybody was holding on to it can receive the cargo of course that makes it unsafe I've never seen one of my clients issue a bear bill okay how about creating non negotiable bills of waiting if the information and the consigning box simply lists the name of a person or entity then the Bill of Lading will not be negotiable here's an example you just write to Bob that is a non negotiable bill of lading there's one more way to make a non negotiable bill of lading just by explicitly stating anywhere on the Bill of Lading that it's non-negotiable or any kind of similar language that demonstrates that you do not intend it to be negotiable so even if it had that magical language to order if you write non negotiable anywhere on it it's not gonna be negotiable all right let's look a little bit deeper into the process of negotiation negotiation happens when you endorse it on the back and then you hand it over to somebody just like there are different ways to issue the Bill of Lading there's also different types of endorsement just like we talked about with a personal check you can endorse it to the order of a person if you do that it remains an order bill if you endorse it to bear it becomes a bear bill if you endorse it to a particular person it stops being negotiable it becomes non negotiable now only that person can receive the cargo from the carrier okay when a carrier issues a bill of lading they typically don't issue just one bill of lading instead they issue a set of three originals this might seem really stupid there is a historical purpose behind this typically negotiable bills of lading are used when goods are purchased with a letter of credit here are the steps the very basic steps of a letter of credit transaction first the buyers bank confirms that it will pay the sellers bank upon delivery of the bills of lading the seller then ships the goods and delivers the bills of lading to the sellers bank the sellers bank then delivers the bills of lading to the buyers bank the buyers bank pays the sellers bank finally the buyers bank delivers the bills of lading to the buyer and the buyer delivers the bills of lading to the carrier so that the buyer can receive the goods all right here's why there are multiple bills of lading multiple originals issued in asset the sellers bank can send each bill of lading separately via FedEx or DHL if one of the bills of lading gets lost in the mail the other two should arrive okay friends that's it for this video if you have any questions feel free to reach out you can go to my website Jack Shelton law comm I appreciate you watching I look forward to seeing you in the next video