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defect in title
Posted: Wed Sep 30, 2009 1:33 pm
by rania
Hi,
what is meant by a b/l is subject to any defect in title however a bill of exchange is not?
b.rgds.
negotible instrument act
Posted: Fri Oct 02, 2009 8:08 pm
by shahriar
my understanding is as follows. friends correct me if im wrong.
say i have a bill of exchange duly accepted by you and a bill of lading endorsed by you to my order. at night Mr. X stole them and endorsed them to Mr. Y who took it in good faith
in this case Mr. Y has a claim over Mr. X with respect to the Bill of exchange. but in case of bill of lading, not as Mr. X was never the owner of the BL.
is my understanding correct?
Defect Title
Posted: Sat Oct 03, 2009 1:12 pm
by nesarul
Dear,
Under a bill of exchange the holder may got a better title over other parties if he/she fulfill the following functions:
1. Received it in good faith and without negligence.
2. For value that is consideration.
3. Within the validity of the instrument.
4. Doesn't have any reasonable ground to believe regarding defective title of it.
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On the other hand it is not possible to get better title under bill of lading for example: title of the goods is subject to any port dues, damaged etc. That is if a bill of lading is issued to the order of issuing bank, it is the responsibility of the ib to pay the dues etc. And in most worst case, if the beneficiary send empty container or container filled with rubbish ... Ib can not get better title despite fulfill the above four function............over shipping company or the beneficiary on the basis of bill of lading.
.
Hope it clarified above. For more information, you can see cdcs study guide.
Regards
Nesar