Law of Carriage Flashcards
What are the components of a contract?
Offer – specific expression of willingness to enter into the contract and its specific terms
Acceptance – the offer is accepted on exact stated terms, converting the offer into an agreement
Consideration – for the agreement to become a contract, the person to whom the offer is made must give something in return for the offer (this can be notional, e.g. some town building rents being 1 peppercorn). This may be at some point in the future, such as x days after signing etc
Legality – the contract must be legally enforceable; contracts cannot relate to unlawful activities
What is maritime arbitrition?
- Private means of settling a dispute
- Created as a faster way of resolving disputes as arbitrators were experienced shipbrokers, so their decisions were more commercial rather than based on legal technicality, but eventually parties began to appoint lawyers to represent themdefeating this purpose
- New York and London introduced specific forms of arbitration to offset this, once again making the process faster and cheaper
- Arbitration awards are final and binding – the only grounds for appeal is a judicial review on a question of law
What is a breach of contract? What happens afterwards?
Breach = one party does not fulfil what they agreed to in the contract
* If it was a major breach, the injured party may withdraw from the contract and claim damages
* If the breach is less major and the injured party does not withdraw from the contract, they can still seek damages
Damages = the loss caused to one party due to a breach by the other; this is sometimes stipulated in the contract, e.g. demurrage costs – these are called liquidated damages
What is tort, and what types are there?
‘Tort’ = liabilities even where no contract exists and no crime was committed, but there was civil wrongdoing
* Negligence/failure in duty of care, e.g. an escape of oil from a ship damaging nearby property
* Trespass causing physical damage to property
* Defamation; libel (written) or slander (verbal) which cause damage to reputation
* Conversion - allowing goods to pass into the hands of an unlawful owner (may be a criminal case of theft)
* Deceit (may be a criminal case of fraud)
Describe the implied terms in charterparties
Implied terms for shipowners:
* Vessel is seaworthy
* Ship will proceed with reasonable dispatch
* Ship won’t make any unjustifiable deviation (note that regardless of other terms, deviations to save life are always justifiable)
Charterers:
* Not to ship dangerous goods without the knowledge of the shipowner
Time charters:
* Only use the vessel between good and safe ports
What international conventions may be included in a charterparty?
- Hague or Hague-Visby rules; clauses incorporating this are called Clause Paramount
- General average subject to York-Antwerp rules, which details how general averages are applied and calculated; the incorporating clause is known as the New Jason Clause
*General average is an agreement that if a ship takes action to avoid peril, all parties contribute to the cost of this action * - Other clauses not covered by international conventions but are often included are both-to-blame collision clauses and war clauses
Summarise Hague-Visby
- Carrier must provide a seaworthy vessel at the start of the voyage; if it becomes unseaworthy during the voyage, negligence must be proven to make the carrier liable
- Carrier to provide BOLs or equiv
- No unjustifyable deviations
- Shipper guarentees the accuracy of cargo details they supply
- There’s a list of things considered outside of the carrier’s control which they cannot be held liable for
- There is a limit to the compensation a carrier must pay in the event of loss or damage (shippers should be insured for the value of goods above this amt)
- Himalaya clause
- Claims are limited to 1yr after delivery/due date of delivery (in the event of non-delivery)
Carrier = ship owner/dispondent owner
*only apply to goods carried via a BOL or sea waybill, not CPs unless specifically added
Outline the Hague Visby Himalaya clause
- It extends protection to anyone working on behalf of the carrier
- This came from ALDER V DICKSON in 1954, where a passenger slipped and fell boarding the Himalaya; whilst the carrier’s liability was limited to the cost of her ticket, she then sued the Master and Boatswain
What are the Hamburg rules?
The united nations commission for trade and development (UNCTAD) held a meeting in Hamburg in 1978 to consider the interests of less developed nations in the carriage of goods by sea, thus creating the Hamburg Rules as a rival to Hague-Visby
Their objective was to favour non-maritime nations, with few ship owners and greater cargo owners.
What are the differences between the Hamburg and Hague-Visby rules?
- Hague Visby only applies once the cargo is over the guardrail whereas Hamburg applies as soon as the carrier has custody of the goods
- Hamburg includes provisions for transporting live animals and deck cargo; HV does not
- Under Hamburg, the carrier is liable to delays unless it was proven to be beyond their control (HV has no provision for losses caused by delays)
- Hamburg limit is 2yrs, not 1
- HV only applies if the cargo is loaded in a HV signatory state, whereas Hamburg applies if it’s loaded OR discharged in a signatory state; this causes issues around juristiction
What are the Rotterdam rules?
- The UN’s attempt in 2009 to simplify Hague/HV/Hamburg
- The goal is to be unbaised (the HV favours the carrier and Hamburg favours the shipper). It also adresses intermodal transport which the others do not
- Only 2 countries (Spain and Togo) have ratified these; 20 are required to become enforable
What is an agency?
- Agents work on behalf of principles where the work is not done by a department in the principle’s own office
- Their function is to bring their principles into contractual relationships with third parties
How can an agency be created?
- By express agreement
- By implication/conduct
- By necessity, e.g. a person is entrusted with another’s property and a definite and/or commercial need arises to deal with said property and it is impossible to obtain the owner’s instructions
What are the duties of an agent?
- Exercise due diligence
- Apply any special skills they profess to have
- To render account
- Not to make a secret profit – this is usually illegal. An example of this would be persuading counterparts to submit inflated bills to increase that agent’s commission
What are the duties of a principle towards their agent?
- To pay the agent as agreed
- To protect the agent against liabilities incurred in carrying out the principle’s orders, including reimbursing expenses the agent has incurred on the principle’s behalf
- To protect the agent against action (including legal action) that should be directed against the principle
