South-Western Legal Studies in Business

Bill of Lading Must Clearly State Liability Options for Carrier to Limit Liability
Description Appeals court held that under federal law, when a carrier prepares a standard form bill of lading for shippers to fill out, it must provide options for different levels of liability or the carrier will be presumed liable for the full value of the shipment.
Topic Negotiable Instruments/Commercial Paper
Key Words Bill of Lading; Liability; Carmack Amendment
C A S E   S U M M A R Y
Facts Between Florida and Texas, Watkins Motor Lines lost a shipment of perfume it was carrying for Sassy Doll Creations. Watkins is liable for the lost shipment, but Sassy contended it was owed $28,274, the full value of the shipment and the amount that it wrote on the bill of lading Watkins supplied. Watkins contends it owed $10,000, the limit of liability according to a formula contained in Watkins’ fees because Sassy did not request excess liability coverage above $10,000. The trial court held that Watkins owed the full amount because its bill of lading did not give the shipper the opportunity to choose excess liability. Watkins appealed.

Affirmed. Under the Carmack Amendment, a carrier of property in interstate commerce that loses a shipment generally is liable for the actual loss or injury to the property caused by the carrier. To limit liability, the shipper must be given a reasonable opportunity to choose between two or more levels of liability. Watkins contends that Sassy prepared the bill of lading, so was responsible for setting the liability limits. That is not correct. The shipper drafts a bill of lading for purposes of determining liability when they actually create the bill, not when they merely fill in the blanks on a bill the carrier created.

Citation Sassy Doll Creations, Inc. v. Watkins Motor Lines, Inc., 331 F.3d 834 (11th Cir., 2003)

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