Misdescription of the goods. The nature and value of the goods can be misdescribed by the shipper for a number of reasons.
The “nature” of the goods includes the amount of the goods and the identifying marks as are required to be furnished in writing by the shipper under the Hague Rules (and the United States Carriage of Goods by Sea Act 1936), Hague-Visby Rules and the Hamburg Rules. The misrepresentation can occur because the seller/shipper attempts to secure a lower freight rate, or because he is attempting to comply with the terms and conditions of a contract of sale, or because he is attempting to evade restrictions imposed by Customs and/or other national authorities. Between the shipper and the carrier the sanction on the shipper is high: the carrier and the ship are not responsible”… for loss or damage to, or in connection with, goods if the nature or value thereof has been knowingly mis-stated by the shipper in the bill of lading”. (Art. IV, r. 5(h) of the Hague-Visby Rules.) A similar exception to the carrier’s liability is found in the United States Carriage of Goods by Sea Act 1936, section 4(5), which adds to “knowingly” the words “and fraudulently”. The shipper is deemed to have guaranteed the accuracy of the information furnished by him (Art. III, r. 5 of the Hague-Visby Rules). Article 17, r. 1 of the Hamburg Rules also requires the shipper to guarantee the information, including the general nature of the goods.
The misdescription can include a general description of “spare parts” when the goods actually shipped, within cases or containers, may have attracted a higher freight rate if the freight rate depended on the commodity shipped. Such misdescription could be a breach of contract and the carrier may be able to bring an action for the proper freight that should have been paid ( according to a United States case Sea Land Service v. Purdy, 1982). If the goods are damaged during loading, carriage or before discharge the carrier may be relieved from liability for damage, because of the breach of contract by the shipper. For example another U.S. case dealing with the U.S. Carriage of Goods by Sea Act 1936, the shipper mis-stated the nature of the goods on the bill of lading as compared with the commercial invoice. The bill of lading description was “wire rods in bundles”. The invoice description was for coils of “bright basic wire in Thomas quality”. The freight rate for coils was about double that for rods and the handling methods were different. The shipper’s claim for damages was dismissed because of his knowing and fraudulent mis-statement of the nature and value of the goods. (La Fortune v. Irish Larch, 1974.)
Similar “misdescription” may occur if the cargo and/or its packaging is in defective condition but the shipper insists on a clean bill of lading.
