The text of this draft contract is based on the contract of the outgoing Director General.

A provision allowing for third parties to a volume contract to expressly agree to be bound by derogations from the draft instrument agreed to as between the parties to the contract should be included in the draft instrument

Draft article 1 (q) Non negotiable electronic transport record and draft article 1(r) Contract particulars

Commentary on scope of application draft article 1 (a) definition of contract of carriage , including the proposed definitions of liner service and non liner service Scope of application draft article 1 (a) was intended to clarify the definition of contract of carriage in draft article 1 (a) of the draft instrument as contained in para. 6 of A CN.9 WG.III WP.36.

It was indicated that a definition of the volume contract should be inserted in the draft instrument.

Mr. Mitrović (Serbia and Montenegro), noting that draft article 9 referred to a communication or a contract , drew attention to the continuing importance of written authorization for the conclusion of a commercial contract.

Parties could simply agree not to apply the whole or a part of the draft convention to a particular contract.

Comments from the UNCTAD Secretariat on Freedom of Contract under the draft instrument

However, it was also suggested that a receipt might well provide evidence of a contract, and that third party holders of a receipt would fall under the scope of application of the proposed text for draft article 4 of the draft instrument insofar as the receipt evidenced the contract.

Scope of application and Freedom of contract (draft articles 1, 2, 88 and 89)

In this context, the Commission might explain, in a note or comment to the draft Convention, the meaning of the term contract as used in the draft Convention.

It was suggested that the requirement that the derogations from the draft instrument should be set forth in the contract of carriage contained in draft article 88a (2) was superfluous, since draft article 88a (1) already mandated that the derogations should be prominent in the contract.

In response, it was indicated that only selected provisions of other international agreements would be applicable to the contract of carriage under the draft instrument, and that the proposed text of draft article 88a (5) would allow derogation from these selected provisions in a volume contract.

Clarification was sought on the use of the words terms that regulate each shipment and terms of a volume contract in proposed draft article 3 (3) of the draft instrument.

However, these form requirements would apply only where the law requires that a contract should be in writing (article 9, paragraph 2, of the draft convention), or where the law requires that a contract should be signed (paragraph 3).

Proposed redraft of provisions regarding scope of application and freedom of contract (draft articles 1, 2, 3, 4, 88, 89 and new draft article 88a)

Each country applied a different regime, ranging from invalidity of the contract to administrative sanctions, penalties that would be inappropriate in the draft convention.

The view was expressed that this was achieved in proposed article 88a (1) by requiring the volume contract to contain a prominent statement that it derogated from the draft instrument, and that either the volume contract was individually negotiated under paragraph (a) or, under paragraph (b), that it prominently specified the sections of the volume contract containing the derogations.

(a) Arising from an original contract that is a contract for the supply or lease of goods or services other than financial services, a construction contract or a contract for the sale or lease of real property

(a) Arising from an original contract that is a contract for the supply or lease of goods or services other than financial services, a construction contract or a contract for the sale or lease of real property

It was suggested that the reference in draft article 88a (5)(a) to draft article 19 of the draft instrument should be placed in a separate paragraph and expanded upon to prevent the parties to a volume contract from reducing their liability for any intentional or reckless behaviour.

Protection of third parties when transport documents or electronic transport records are issued under a contract exempted from the scope of application of the draft instrument

Further, it was thought that a contract could implicitly provide for carriage by sea, and that, in any event, the key for determining the scope of application of the draft instrument was the contract of carriage, not the actual carriage of the goods.

In addition, further examination of draft articles 88 and 89, which also address freedom of contract issues, will be necessary.

However, the view was also expressed that the consent of third parties to be bound by the terms of a volume contract derogating from the draft instrument was not necessary since third parties such as consignees would wilfully acquire rights under the contract of carriage, and a special regime should be envisaged only in the case of issuance of negotiable transport documents, possibly along the lines of draft article 77 of the draft instrument.

Support was expressed for the suggestion that a provision along the lines of draft article 5, as it appeared in A CN.9 WG.III WP.44, provided sufficient protection to third parties entitled to rights under the contract of carriage, and that no additional provision to protect third parties was required with respect to derogation from the draft instrument by the parties to a volume contract.

A smaller number of delegations expressed the strongly held view that the draft instrument should not allow parties to a contract of carriage to agree to exclusive jurisdiction clauses.

However, it was observed that draft article 88a (2) mandated that all derogations should be contained in the contract of carriage.

In determining the scope of application, the draft, operating in a favourable way, requires that electronic communications be used in concluding or implementing a contract or agreement between parties from different States, on condition that those different States should be apparent from the contract or from any dealings between the parties, irrespective of the nationality of the parties or of whether the contract is of a civil or a commercial character.

Article 51 A contract of insurance of persons is an insurance contract insuring a person's life and body.

It was indicated that the intended effect of the proposed draft of article 4 was to provide protection to third parties under the draft instrument in cases where a transport document or electronic transport record was issued pursuant to a contract that remained outside the scope of application of the draft instrument under its draft article 3 (1)(a), (b) or (c).

It was suggested that requesting consent to be bound by the terms of a volume contract derogating from the draft instrument would provide sufficient safeguards to third parties.

However, it was also observed that the use of the words any shipment could generate misunderstanding since only some terms of the volume contract might be subject to the draft instrument, for example in the case of a volume contract that mixes international and domestic shipments.

It was further observed that draft article 88a (4) reflected the decision that only those terms of a volume contract regulating shipments falling under the scope of application of the draft instrument would be subject to derogation (see above, para.

(b) in a written contract or

Form of a contract of assignment

The view was expressed that draft article 88a (3) required further clarification with respect to the relation between the transport document, as defined in draft article 1 (k), and the contract of carriage.

It was suggested that the following four conditions should be met before it would be possible for a volume contract, or individual shipments thereunder, to derogate from the draft instrument

(a) Original contract means the contract between the assignor and the debtor from which the assigned receivable arises

The Working Group considered draft article 14 on the basis of liability, and freedom of contract (draft articles 1, 2, 88 and 89), including scope of application, third parties and Ocean Liner Service Agreements (OLSAs).

(iii) any other contract or transaction of a commercial, industrial, trading or professional nature, but not including a contract of employment of persons.

(a) Contract of carriage means a contract in which a carrier, against the payment of freight, undertakes to carry goods from one place to another.

(a) Contract of carriage means a contract in which a carrier, against the payment of freight, undertakes to carry goods from one place to another.

Conversely, the terms or stipulations of the volume contract that did not regulate individual shipments remained outside the scope of application of the draft instrument.

The legal effects that flow from the conclusion of a contract apply without distinction to all parties to the contract.