What differentiates a clean Bill of Lading from a claused Bill of Lading?

• A. A clean B/L shows no discrepancies or reservations; claused B/L carries notes about damage, discrepancy, or shortage.
• B. A clean B/L is always issued by the shipper; claused B/L by the carrier.
• C. Clean B/L guarantees insurance; claused B/L indicates no insurance.
• D. Clean B/L cannot be endorsed; claused B/L can be endorsed.

Answer: (A)

The main idea is whether the carrier notes any exceptions when taking custody of the goods. A clean Bill of Lading means the cargo was received in apparent good order with no discrepancies or reservations recorded. A claused Bill of Lading, on the other hand, carries remarks about damage, shortage, or other discrepancies, indicating the carrier has reservations about the condition or quantity of the goods.

This distinction matters because a clean B/L is typically more favorable for smooth title transfer and for documentary credits, while a claused B/L signals problems that can affect insurance claims and the ability to claim damages or take possession without dispute.

The other statements aren’t correct because the B/L is issued by the carrier (or their agent), not the shipper; insurance is a separate contract and not guaranteed by a clean B/L; and both clean and claused B/Ls can be endorsed, so endorsement capability isn’t determined by whether the B/L is clean or claused.