Back Letter

Summary of Back Letter

A letter of indemnity issued by a shipper of cargo to a steamship line to secure issuance of a clean bill of lading where one might not be issued otherwise. For example, a carrier may initially refuse to issue a clean bill of lading for cargo which appears to be damaged; a notation to this effect on the bill of lading would normally preclude collection by the shipper under a letter of credit. To prevent issuance of an unclean bill of lading, the shipper might provide the carrier with a back letter stipulating that the goods are sound, despite appearances to the contrary, and holding the carrier harmless. Also, a retroactive clarification of the terms or conditions of a charter party.

(Main Author: William J. Miller)

Back Letter in International Trade

Meaning of Back Letter, according to the Dictionary of International Trade (Global Negotiator): A complement to a contract laying down rights and/or obligations that for whatever reasons the contracting parties cannot state in the original contract.

A letter of indemnity provided by a shipper to a carrier, inducing the carrier to provide a clean transport document under circumstances where this would not otherwise be done.