(a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise the degree of care in relation to the goods that a reasonably careful person would exercise under similar circumstances. This subsection does not affect any statute, regulation or rule of law that imposes liability upon a common carrier for damages not caused by its negligence.

(b) Damages may be limited by a term in the bill of lading or in a transportation agreement that the carrier's liability may not exceed a value stated in the bill or transportation agreement if the carrier's rates are dependent upon value and the consignor is afforded an opportunity to declare a higher value and the consignor is advised of the opportunity. However, such a limitation is not effective with respect to the carrier's liability for conversion to its own use.

(c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the shipment may be included in a bill of lading or a transportation agreement.

History: 1953 Comp., § 50A-7-309, enacted by Laws 1961, ch. 96, § 7-309; 2005, ch. 144, § 75.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior Uniform Statutory Provision. — Former Section 7-309 [55-7-309 NMSA 1978].

Changes. — References to tariffs eliminated because of deregulation, adding reference to transportation agreements, and for style.

1. A bill of lading may also serve as the contract between the carrier and the bailor. Parties in their contract should be able to limit the amount of damages for breach of that contract including breach of the duty to take reasonable care of the goods. The parties cannot disclaim by contract the carrier's obligation of care. Section 1-302 [55-1-302 NMSA 1978].

Federal statutes and treaties for air, maritime and rail transport may alter the standard of care. These federal statutes and treaties preempt this section when applicable. Section 7-103 [55-7-103 NMSA 1978]. Subsection (a) does not impair any rule of law imposing the liability of an insurer on a common carrier in intrastate commerce. Subsection (b), however, applies to the common carrier's liability as an insurer as well as to liability based on negligence. Subsection (b) allows the term limiting damages to appear either in the bill of lading or in the parties' transportation agreement. Compare 7-204(b) [55-7-204(b) NMSA 1978]. Subsection (c) allows the parties to agree to provisions regarding time and manner of presenting claims or commencing actions if the provisions are either in the bill of lading or the transportation agreement. Compare 7-204(c). Transportation agreements are commonly used to establish agreed terms between carriers and shippers that have an on-going relationship.

2. References to public tariffs in former Section 7-309(2) [55-7-309(2) NMSA 1978] and (3) have been deleted in light of the modern era of deregulation. See Comment 2 to Section 7-103 [55-7-103 NMSA 1978]. If a tariff is required under state or federal law, pursuant to Section 7-103(a), the tariff would control over the rule of this section. As governed by contract law, parties may incorporate by reference the limits on the amount of damages or the reasonable provisions as to the time and manner of presenting claims set forth in applicable tariffs, e.g. a maximum unit value beyond which goods are not taken or a disclaimer of responsibility for undeclared articles of extraordinary value.

3. As under former Section 7-309(2) [55-7-309(2) NMSA 1978], subsection (b) provides that a limitation of damages is ineffective if the carrier has converted the goods to its own use. A mere failure to redeliver the goods is not conversion to the carrier's own use. "Conversion to its own use" is narrower than the idea of conversion generally. Art Masters Associates, Ltd. v. United Parcel Service, 77 N.Y.2d 200, 567 N.E.2d 226 (1990); See, Kemper Ins. Co. v. Fed. Ex. Corp., 252 F.3d 509 (1st Cir), cert. denied 534 U.S. 1020 (2001) (opinion interpreting federal law).

4. As used in this section, damages may include damages arising from delay in delivery. Delivery dates and times are often specified in the parties' contract. See Section 7-403 [55-7-403 NMSA 1978].

Cross References. — Sections 1-302 [55-1-302 NMSA 1978], 7-103 [55-7-103 NMSA 1978], 7-204 [55-7-204 NMSA 1978], 7-403 [55 7-403 NMSA 1978].

"Action". Section 1-201 [55-1-201 NMSA 1978].

"Bill of lading". Section 1-201.

"Carrier". Section 7-102 [55-7-102 NMSA 1978].

"Consignor". Section 7-102.

"Document of Title". Section 1-102 [55-1-102 NMSA 1978].

"Goods". Section 7-102.

"Value". Section 1-204 [55-1-204 NMSA 1978].

Repeals and reenactments. — Laws 2005, ch. 144, § 75, effective January 1, 2006, repealed former 55-7-309 NMSA 1978 as enacted by Laws 1961, ch. 96, § 7-309, and enacted a new section. Pursuant to 12-2A-14 NMSA 1978, the 2005 revision is considered an amendment rather than a new enactment.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 14 Am. Jur. 2d Carriers § 552 et seq., 578; 15A Am. Jur. 2d Commercial Code § 48.

Application of state statute as to carrier's limitation of common-law liability to federal government operating railroads, 4 A.L.R. 1680, 8 A.L.R. 969, 10 A.L.R. 956, 11 A.L.R. 1450, 14 A.L.R. 234, 19 A.L.R. 678, 52 A.L.R. 296.

Stipulation limiting amount of carrier's liability as applicable where goods are stolen by its employee, 5 A.L.R. 986, 52 A.L.R. 1073.

Carrier's right to stipulate against liability for loss resulting from strike causing delay in transportation, 45 A.L.R. 921.

Refusal on grounds of public policy of forum to enforce stipulation in carrier's contract limiting its liability, valid according to the proper law of the contract, 57 A.L.R. 175.

Effect of value limitation clause in bill of lading or shipping receipt for goods misdescribed therein or not received by carrier, 74 A.L.R. 1382.

Validity as affected by rule against unjust discrimination, of agreement in bill of lading to insurance, 76 A.L.R. 1265.

Provision in warehouseman's receipt limiting liability as applicable where warehouseman converts property, 99 A.L.R. 226.

Provision in carrier's contract regarding amount of recovery for damages as provision of liquidating damages or limitation of liability, 128 A.L.R. 632.

Presumption and burden of proof as to consignee's title to or interest in respect of goods comprising shipment, in consignee's action against carrier for loss, damage, delay, nondelivery or conversion, 135 A.L.R. 456.

Expiration of period prescribed by bill of lading or statute or shipper's claim or action against carrier as affecting his rights to avail himself of claim by recoupment in carrier's action against him, 140 A.L.R. 816.

Initial carrier's liability as that of carrier or of warehouseman in respect to goods while in its warehouse awaiting delivery to connecting carrier, 172 A.L.R. 802.

Presumption and burden of proof or of evidence where goods stored in situation governed by Uniform Warehouse Receipts Act are stolen, or are damaged or lost by fire or water, 13 A.L.R.2d 681.

Provision in bill of lading prohibiting or limiting consignee's right to inspect goods shipped, 25 A.L.R.2d 770.

Conclusiveness of receipt clauses in bill of lading, 67 A.L.R.2d 1028.

Railroad carrier's liability where goods were allegedly damaged by failure to properly refrigerate, 4 A.L.R.3d 994.

Liability of carrier by land for damage to goods resulting from improper packing by carrier, 7 A.L.R.3d 723.

Validity and construction of stipulation exempting carrier from liability for loss or damage to property at nonagency station, 16 A.L.R.3d 1111.

Validity of contractual provision limiting place or court in which action may be brought, 31 A.L.R.4th 404.

Liability of warehouseman or other bailee for loss of goods stored at other than agreed-upon place, 76 A.L.R.4th 883.

13 C.J.S. Carriers §§ 405, 406, 448 to 459.