Ask the Editor

What is the difference between a Mate’s Receipt (MR) and a Bill of Lading (BL)?

This is often asked by some of our ship agent members. Essentially, these are two different documents with two different functions. The MR is the ship’s receipt of the goods. The document usually contains the type of cargo, the shipper’s name, the date of receipt/loading on board, the port of loading and discharge and most importantly, a description of the goods, noting any marks or damage to the cargo or packing. If no remarks are made, this is often referred to as a “clean” receipt. If remarks or comments are made, it is referred to as a “claused” receipt. Most shippers want a clean receipt. The MR is usually signed by the Master or Chief Officer.

The Bill of Lading has multiple functions. It is itself a receipt of the goods (once it has been swapped for the MR), is usually the evidence of the contract of carriage between the shipper and the carrier and finally, it is a document of title (ie it indicates an ownership or ownership interest in the goods – which is necessary if they are to be sold during the carriage). The information on the BL is usually taken from the MR. The two documents should match. If they do not, problems can arise for the carrier and in turn, for the agent.

You can watch ITIC’s bills of lading e-learning seminar, for more information, here: https://www.itic-insure.com/knowledge/e-learning/bills-of-lading/

What is a breach of warranty of authority?

ITIC provides cover for this exact issue – but what is it?

When an agent (often a broker) goes out into the world they will often be representing a principal. In other words, they warrant to third parties that they have the authority of the principal they claim to represent. If it
turns out that they do not actually have the authority of the principal this is a breach of that warranty for which the broker will be liable if a third party has suffered a loss from relying on that authority. There are some different types of breach of warranty of authority but ultimately, it does not matter if the broker is innocent (ie the principal lied to them or a broker higher up in a chain represented they had authority when they
did not) or if they did it on purpose. The broker will inevitably have a liability to the innocent third party who relied on the warranty of authority.