Dirty Bill of Lading

A bill of lading on which the carrier has recorded that the goods or their packing were damaged or deficient at the time of receipt. Also called a claused or foul bill.

Because letters of credit require a clean bill, a clause can stop payment. That pressure is why shippers sometimes offer a letter of indemnity to have a clause removed - an arrangement that shifts the exposure rather than resolving it, and one insurers view poorly.