Even the applicability of privity of contract to the maritime contracts was established only after the court rulings in Tweddle & Atkinson 1 and Thompson v Dominy 2. Section 1 of the Bill of Lading Act was enacted to provide the right of suit to the consignee as well as the transferee of the Bill of Lading thus providing an exception to the privity of contract. However one major flaw was that the right of suit was made available only in respect of the conditions specifically and expressly mentioned in the Bill of lading. since the essence of Section 1 is to transfer the right of suit 'as if the contract contained in the bill of lading had been made with himself' . Thus made the section inoperative in those cases where the right of suit on reasons otherwise than on consignment or endorsement and this wording was adversely affecting the position of the Banks in whose favour the bills of lading were endorsed not giving them the right to sue.
Under the circumstances where the Bills of lading were not able to be received by the consignees within such time the vessel reaches the destination, the buyer became the owner of the goods by producing a 'letter if indemnity'. ...Show more