International Business Law Case Study Example | Topics and Well Written Essays - 2750 words

International Business Law - Case Study Example A very common problem used to be that the buyer of goods is not the shipper of the goods and is therefore not privy to the contract with the carrier. (Sellman 2003, page 87). This becomes relevant when the goods or cargo are damaged or lost by the carrier. Even though there may be a bill of lading, such document transfers only ownership of the goods; it does not transfer the contract nor does it allow the buyer to step into the shoes of the seller. It is a fundamental precept of law that only the parties to a contract can file an action for breach of that contract. Hence, the buyer cannot sue the carrier to recompense his loss nor can the carrier in any way be made liable to the buyer for damages arising from the contract. Privity of contract essentially means that a contract cannot confer rights or impose obligations to anyone except the parties under it. In the case of Grant v. ... (Leng 1992, page 133). These serious problems were solved by the passage of the Bill of Lading Act of 1855, which specifically allowed the transfer of the rights of suit to the consignee. But while the passage of the Act at least eliminated some of the problems of the previous legal regime particularly with regard to the impunity of the carrier of the goods, it was still deficient in many respects. A significant problem was with respect to undivided bulk cargoes, wherein the bill of lading endorsement still does not have the effect of transferring rights to sue. It still passes only during physical delivery. Moreover, the Bill of Lading Act does not apply to waybills. Waybills are used in situations wherein the goods are not the subject of a sale contract and the shipper retains the right to nominate the identity of the receiver. Hence, the consignee of waybills does not have a cause of action against the carrier, and may not proceed against him in cases of breach. Lastly, the Act does not apply, evidently enough, where the document is not a bill of lading, nor does it cover a situation wherein the property passed before endorsement. All these concerns were solved by the passage of the Carriage of Goods by Sea Act of 1992, or the COGSA. As stated by Robert Bradgate and Fidelma White (Bradgate & White 1993, p. 188) "the primary motive for reform was the recognition that, as recent cases showed, English law no longer dealt adequately with the problems created by modern trade and carriage practices, especially where goods were lost or damaged in transit and that those problems were better dealt with by other jurisdictions, including those of the United States and some other European