Cancelling Charterparty: Charterers’ Right to Cancel When the Ship Is Late

A cancelling clause in a charterparty gives Charterers a contractual option to bring the fixture to an end if the ship is not at the agreed place, or is not ready to load or deliver, by the agreed cancelling date and time. In commercial shipping, the cancelling date is one of the most important dates in the fixture because it marks the point at which Charterers may decide whether they still want the ship or whether they prefer to walk away and arrange alternative tonnage.

If the ship has not arrived at the first loading port, or is not ready to load by the cancelling date and time, many Charter Parties give Charterers an absolute right to terminate the agreement. This right is usually independent of fault. Charterers may be able to cancel even if the delay was caused by events beyond Shipowners’ control, unless the charterparty wording provides otherwise. The cancelling clause therefore operates as a contractual option, not necessarily as a damages clause.

One practical point often overlooked during fixture negotiations is the timing and method of the Charterers’ cancellation notice. Parties tend to focus on freight, laycan, loading rates, demurrage, ship description, cargo quantity, and port rotation. Less attention is often given to what must happen if the ship is late. This can create uncertainty when the ship is approaching the load port but cannot meet the cancelling date.

Under English law, a Charterer is not required to declare the cancellation before the ship reaches the relevant stage, unless the charterparty expressly requires an earlier declaration. In other words, Charterers are not normally forced to tell Shipowners in advance whether they will cancel simply because Shipowners believe the ship will be late. The option to cancel generally arises only when the contractual cancelling point has been reached and the ship is still not ready.

Some charterparty forms modify this position by allowing Shipowners to call upon Charterers to state whether they will cancel or continue. In the standard GENCON Charter Party form, Charterers may be required to declare their intention to cancel no later than 48 hours before the ship’s anticipated arrival when the contractual mechanism is triggered. The purpose is to prevent Shipowners from sending the ship on a costly ballast voyage to the loading port only to discover on arrival that Charterers have decided to cancel.

The commercial problem is clear. If a ship is expected to be one month late, Shipowners may assume that Charterers will cancel. However, Charterers may not want to cancel if the market has risen and the delayed ship remains cheaper than replacement tonnage. Charterers may also have another cargo that fits the new arrival window. For this reason, Shipowners should not assume that a late ship will automatically be rejected. Unless the charterparty gives Shipowners a right to demand an early decision, Charterers may be entitled to wait.

If Shipowners know before the cancelling date that the ship cannot arrive on time, they face a difficult operational choice. If Charterers refuse to give a clear answer, Shipowners may still need to send the ship toward the load port in order to comply with the charterparty and reduce the risk of a breach claim. The Cancelling Clause explicitly allows the Charterer to end the Charter Party if the ship is not ready by the agreed deadline, but it does not always release Shipowners from the duty to proceed toward the loading place before cancellation is actually exercised.

Some legal analysis has taken the view that the cancelling right is not exercisable until the cancelling date has actually arrived. This is important because there is generally no automatic right of anticipatory cancellation merely because it has become obvious that the ship will not arrive on time. Unless the charterparty provides a special mechanism, Charterers may have to wait until the cancelling date passes before cancelling, while Shipowners may still have to continue performance until the option is validly exercised.

Cancelling Clause 2002 (Code Name: CANCELCON 2002)

Cancelling Clause 2002 (Code Name: CANCELCON 2002) is a standard-style cancelling clause designed to provide a clearer contractual framework where the ship may not meet the cancelling date. Its purpose is to reduce uncertainty by setting out when notice must be given, how Charterers should respond, and what happens if the ship is not ready by the agreed date.

In practice, a structured cancelling clause is useful because the parties need certainty before committing additional money and operational resources. Shipowners may need to decide whether to ballast the ship to the load port, arrange bunkers, employ tugs, pay canal dues, or reposition the ship from another trade. Charterers may need to know whether to nominate cargo, arrange terminal windows, obtain export documentation, or fix substitute tonnage. A clear clause helps both sides avoid unnecessary expense and delay.

Key provisions of CANCELCON 2002 typically include:

  1. Notice Requirement: The party required to act must give written notice within the period stated in the clause. The notice period is intended to prevent last-minute uncertainty and to give the other party a fair opportunity to make a commercial decision.
  2. Cancellation: If the ship is not ready by the cancelling date, and the clause conditions are satisfied, Charterers may exercise the right to cancel the charterparty.
  3. Proof of Readiness: If Shipowners state that the ship is ready or will be ready by a particular date, they should be able to support that statement with reliable operational information.
  4. Bunkers: If cancellation affects bunkers ordered, supplied, or arranged for the charter service, the clause may allocate responsibility for those bunker costs.
  5. Dispute Resolution: A cancellation clause may be linked to the charterparty dispute resolution provisions, including arbitration, governing law, or other agreed procedures.
  1. Indemnification: Some clauses may address costs incurred in preparing the ship for the fixture, including port expenses, crew arrangements, agency costs, or other expenditure caused by the cancellation situation.
  2. No Show: If Charterers fail to provide cargo when the ship is ready and in position, Shipowners may have separate remedies depending on the wording of the charterparty.
  3. Force Majeure: A cancellation framework may interact with force majeure wording if extraordinary events prevent performance and neither party is at fault.
  4. Other Breaches: Separate cancellation or termination rights may arise from non-payment, insolvency, failure to maintain the ship, unlawful orders, or other serious breaches, but these should not be confused with the ordinary cancelling date mechanism.
A cancellation clause should not be treated as a casual administrative provision. It can determine whether a multimillion-dollar fixture continues or ends. The wording should therefore be checked carefully during negotiations, especially where the ship is not nearby, the cargo program is time-sensitive, or the freight market is volatile.

Where can I find CANCELCON 2002?

The original Charter Party forms and CANCELCON 2002 should be obtained from the organization or publisher that issues the standard form documents used by the parties. Parties should always rely on the actual clause incorporated into their charterparty, not on informal summaries or older drafts.

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to obtain the original Charter Party forms and CANCELCON 2002. www.bimco.org

Cancellation of a Ship Under a Voyage Charter

In a voyage charter, the cancelling clause normally protects Charterers if the ship is not ready to load at the agreed loading port by the cancelling date. The clause is closely connected with the laycan period. The laydays identify the earliest time when Charterers must provide cargo and the ship may present for loading. The cancelling date identifies the latest time by which the ship must be ready if Charterers are to remain bound.

Consider a voyage charter on an amended GENCON form. Clause 10 may provide that if the ship is not ready for loading by the agreed cancelling date, Charterers have the option to cancel. Before that date arrives, it may become obvious that the ship cannot reach the loading port in time. Charterers may already have sale contracts, supply obligations, terminal bookings, or cargo commitments that require shipment by a fixed date. In such circumstances, Charterers may need to arrange substitute tonnage before the cancelling date has passed.

The legal difficulty is that the Charterers’ contractual option to cancel may not yet be exercisable. Unless Shipowners issue a notice requiring Charterers to declare their option under the charterparty, Charterers may have to wait until the cancelling date before cancelling under the clause. Charterers and Shipowners can always negotiate an agreed cancellation before that date, but unilateral anticipatory cancellation is risky if the charterparty does not permit it.

In practice, Charterers may protect their commercial position by fixing substitute tonnage while reserving rights under the original charter. Once the cancelling date passes and the ship is still not ready, Charterers may then exercise the cancellation option. The precise strategy depends on the charterparty wording, the facts, and the risk of damages exposure.

Cancelling Clauses

Cancelling Clauses are primarily designed for the benefit of Charterers. They allow Charterers to cancel the charterparty if the ship does not arrive or become ready within the agreed contractual window. This protects Charterers against late tonnage and gives them the ability to obtain another ship when the original ship no longer fits the cargo program.

However, a cancelling clause does not automatically give Charterers a claim for damages. Cancellation and damages are separate issues. The right to cancel may arise even without fault by Shipowners. A claim for damages normally requires a separate breach, such as an inaccurate description of the ship’s position, an unreasonable expected readiness date, failure to proceed with due dispatch, failure to give required notices, or another breach of the charterparty.

Similarly, Shipowners are not automatically liable in damages merely because the cancelling date is missed. If the contract gives Charterers the option to cancel if the ship is late, the exercise of that option ends the charterparty according to its terms. Damages depend on whether Shipowners have also breached another obligation that caused loss.

Cancelling Clauses in Voyage Charters

Standard voyage charter forms often contain cancellation provisions that begin with the same basic principle: if the ship is not ready for loading on or before the cancelling date, Charterers may cancel. The form and timing of the cancellation option may differ, but the commercial purpose is broadly consistent.

Gencon 1976 Charter Party – clause 10, lines 121-129

Under the older GENCON approach, if the ship is not ready to load, whether in berth or not, by the agreed cancelling date, Charterers have the option to cancel the charterparty. If Shipowners demand a declaration, Charterers may have to state their intention at least 48 hours before the ship’s expected arrival at the loading port. The form also deals with delay caused by average or other reasons and may allow cancellation where delay continues beyond a stated period if no specific cancelling date has been agreed.

Gencon 1994 Charter Party – clause 9, lines 138-153

The later GENCON approach gives Shipowners a more active mechanism. If Shipowners believe that, despite due diligence, the ship will not be ready by the cancelling date, they must notify Charterers promptly, state the expected readiness date, and ask whether Charterers will cancel or agree to a new cancelling date. Charterers must respond within the period stated in the clause. If Charterers do not cancel, the charterparty is amended so that a new cancelling date is fixed by reference to the revised expected readiness date.

The important difference is that the later mechanism reduces uncertainty for Shipowners. Instead of forcing Shipowners to continue toward the loading port without knowing whether Charterers will cancel, it allows Shipowners to obtain an early decision. At the same time, Charterers lose some flexibility because they may have to make a decision before the original cancelling date has passed.

In both versions, the basic starting point remains the same: Charterers may cancel if the ship is not ready by the cancelling date. The option must be exercised at the proper time and in the proper manner. A cancellation made too early may be ineffective. A cancellation made too late may be treated as waived, depending on the circumstances and the clause wording.

“Ready to load” usually means that the ship has reached the agreed loading place and is in a condition that enables cargo operations to commence for the purposes of the cancelling clause. This is not always exactly the same as readiness required for a fully valid Notice of Readiness (NOR). For cancelling purposes, the question is whether the ship has substantially met the contractual requirement for loading readiness. If Charterers allege that the ship was not ready because of a defect, they normally need to show that the defect was material.

The remainder of the cancelling clause often provides Shipowners with a procedure to force a decision from Charterers. These procedures matter because Shipowners may otherwise be exposed to unnecessary cost in sending the ship to the port without knowing whether the fixture will survive.

Gencon 1976 Charter Party

Under the older GENCON-style wording, Shipowners may be able to demand that Charterers declare whether they intend to cancel. Once the demand is properly made, Charterers must respond within the required period. Until that mechanism is activated, Charterers may not be obliged to answer earlier requests for cancellation or extension.

The practical purpose is to give Shipowners some protection from the commercial risk of proceeding toward a port only to be cancelled on arrival. However, the protection is limited. If the notice period is only 48 hours before expected arrival, Shipowners may still have spent significant time and cost repositioning the ship before learning Charterers’ final decision.

Gencon 1994 Charter Party

The later GENCON-style wording provides stronger protection for Shipowners. If Shipowners anticipate that the ship will not be ready in time, they must tell Charterers and provide the expected date of readiness. Charterers then have a defined time to choose whether to cancel or continue. If Charterers continue, the cancelling date is moved to a new date calculated under the clause.

The right of Shipowners to use this mechanism may be limited to one occasion. If the ship suffers further delay after the new cancelling date is fixed, Charterers may again have the right to cancel under the basic cancelling provision. This prevents Shipowners from repeatedly extending the cancelling date through successive notices.

Other Voyage Charter Parties

Other voyage charter forms may use different wording. Some allow Charterers to cancel if no valid Notice of Readiness (NOR) is tendered before the cancelling date. Some require Charterers to exercise the cancellation option within 24 hours after the cancelling date. Some allow cancellation until a valid NOR is tendered, or until a short period after tender. Some provide no mechanism for Shipowners to demand an early decision.

Examples of other variations that may arise are as follows:

  • Charterers may have the right to cancel if no valid Notice of Readiness (NOR) is given before the cancelling date.
  • Charterers may be required to declare cancellation within a fixed period after the cancelling date, failing which the charterparty remains in force.
  • The cancelling right may depend on the ship being ready at a named berth, within port limits, at anchorage, or at another agreed place.
  • The clause may distinguish between delay before arrival and failure to pass inspection after arrival.
  • The clause may provide a revised cancelling date if Shipowners give notice of expected delay.

Voyage Charter Party Cancellation and Damages Claims

The right to cancel under a cancelling clause does not itself create a right to damages. Charterers must identify a separate breach if they want compensation. Typical examples include an inaccurate statement of the ship’s present position, an unrealistic expected ready-to-load date, failure to proceed to the loading port with reasonable dispatch, failure to give required ETA notices, or failure to keep Charterers properly informed of delay.

In many voyage charters, the ship’s present position and expected readiness date are central to the fixture. If Shipowners provide information without reasonable grounds, and Charterers rely on it, Shipowners may be liable for loss caused by the inaccurate information. The cancelling clause may allow Charterers to end the charter, but the damages claim arises from the separate misrepresentation or breach.

There is often an implied or express obligation on Shipowners to begin and prosecute the approach voyage to the loading port with due dispatch. The phrase “expected ready to load” suggests that Shipowners must have a reasonable basis for the stated readiness date and must act consistently with that expectation. If the ship is delayed because Shipowners did not proceed properly, Charterers may have a damages claim in addition to the cancellation option.

ETA notices can also create liability. If the charterparty requires Shipowners to give delivery or arrival notices, the notices should be reasonable, timely, and honestly based on available information. A failure to give proper notices may cause Charterers to incur avoidable expenses, miss cargo commitments, or fail to arrange substitute tonnage. Those losses may be recoverable if the contractual and causation requirements are satisfied.

Cancelling Clauses in Time Charters

Time charters also commonly contain cancelling clauses. Instead of focusing on readiness to load at the first loading port, the time charter clause usually focuses on delivery of the ship into Charterers’ service at the agreed place and by the agreed date. If the ship is not delivered by the cancelling date, Charterers may have the option to cancel.

Under older time charter wording, Charterers may be given the right to cancel if the ship has not given written notice of readiness for delivery by the agreed date and time. The notice of readiness in this context is the notice required for the ship to enter Charterers’ service, not the voyage charter NOR used for loading. The ship must be at the agreed delivery place and in the condition required by the charterparty.

Other standard time charter forms allow Charterers to cancel if the ship has not been delivered by the cancelling date or is not ready for delivery on the agreed date. The same broad principles apply as in voyage charters: Charterers usually cannot cancel before the cancelling date unless the clause permits it, and Shipowners may have a mechanism to ask Charterers whether they will cancel if delay becomes apparent.

Older forms may give Charterers more flexibility because Shipowners have less ability to force an early decision. More modern or amended clauses may give Shipowners greater protection by requiring Charterers to declare their intention within a specified time after receiving notice of expected delay.

Time Charter Party Cancellation and Damages Claims

As with voyage charters, cancellation under a time charter cancelling clause does not automatically produce a claim for damages. Charterers may cancel if the contractual conditions are met. To recover damages, Charterers must show a separate breach, such as failure to exercise reasonable diligence in delivering the ship, inaccurate delivery notices, misleading ETA information, or failure to provide the ship in the contractual condition.

If Shipowners give an estimated delivery date without reasonable grounds, or fail to update Charterers when the estimate becomes unrealistic, Charterers may suffer loss by arranging cargoes, sub-fixtures, bunkers, terminals, or replacement commitments based on unreliable information. Damages may be assessed by placing Charterers in the position they would have been in if reasonable and accurate information had been provided.

Condition of the Ship Upon Delivery and Place of Delivery

If the ship is physically present by the cancelling date but is not in the contractual condition required for delivery, Charterers may still argue that the ship was not ready. The issue may involve seaworthiness, class status, certificates, holds, cranes, trading documents, flag requirements, crew readiness, bunker condition, or other delivery obligations.

The place of delivery is equally important. If the charterparty requires delivery at a named port, anchorage, pilot station, passing point, or berth, the ship must satisfy that requirement. A ship close to the delivery area may not be delivered if the charterparty requires a specific location and the ship has not reached it. Whether this gives a right to cancel depends on the wording and facts.

What is the Cancelling Clause of a Time Charter?

A cancelling clause in a time charter is a provision allowing Charterers to cancel the charter if Shipowners do not deliver the ship by the agreed cancelling date. The cancelling date is often part of the laycan or delivery window. It protects Charterers from being locked into a charter when the ship arrives too late for their commercial program.

The clause usually identifies:

  1. The cancelling date or delivery deadline by which the ship must be delivered.
  2. The place and condition in which the ship must be ready for delivery.
  3. The method and timing of any notice of cancellation.
  4. Whether Shipowners can ask Charterers to declare their option before the ship arrives.
  5. Whether the cancelling date can be extended following Shipowners’ notice of delay.
  6. Whether cancellation affects any claims for damages or other rights.
Here's an example of what a cancelling clause might look like:

“If the Ship is not delivered to Charterers at the agreed delivery place, ready in accordance with this Charter Party, by 17:00 hours local time on [date], Charterers shall have the option to cancel this Charter Party. Any notice of cancellation shall be given in writing to Shipowners or their agents in accordance with the notice provisions of this Charter Party.”

This is only a simplified illustration. Actual charterparty wording may include detailed provisions on notices, time zones, revised cancelling dates, delivery condition, and the effect of delay.

What is the Cancellation Clause of a Charterparty?

A cancellation clause in a charterparty is a contractual provision that gives one party, usually Charterers, the right to bring the contract to an end if a specified event occurs. In voyage and time charters, the most common event is the ship’s failure to arrive, load, or deliver by the cancelling date. However, cancellation clauses may also deal with other events depending on the charterparty wording.

Typical grounds may include:

  1. Late Delivery: If the ship is not delivered to Charterers by the agreed date, Charterers may have the right to cancel.
  2. Failure to be Ready: If the ship arrives but is not ready to load or deliver in the contractual sense, Charterers may be able to cancel.
  3. Off-Hire Period: Some contracts may permit termination if the ship remains off hire beyond an agreed period.
  4. Breach of Contract: Serious breaches may give rise to termination rights, especially where the breach goes to the root of the contract.
  5. Insolvency: Some charterparties include wording allowing cancellation or termination if either party becomes insolvent.
  6. Force Majeure: Certain contracts allow termination if extraordinary events prevent performance for a specified period.
The exact effect of any cancellation clause depends on the charterparty wording. A party should not assume that a general right to cancel exists. The clause must be read carefully, together with the law clause, notice provisions, delivery terms, laycan wording, and any rider clauses.

Exercising a Right to Cancel a Charterparty

Exercising a right to cancel a charterparty requires accuracy, timing, and clear communication. A cancellation notice that is premature, late, unclear, sent to the wrong party, or based on the wrong clause may be ineffective. In some circumstances, an invalid cancellation may itself amount to a breach by the party attempting to cancel.

A practical approach includes:

  1. Review the Contract: Read the cancelling clause, notice clause, delivery or loading provisions, rider clauses, and governing law clause together.
  2. Identify Grounds for Cancellation: Confirm that the event triggering cancellation has actually occurred, such as failure to be ready by the cancelling date.
  3. Check Timing: Determine whether the right has already arisen and whether any response period or deadline applies.
  4. Check Readiness: Establish whether the ship was ready in the contractual sense, including location, condition, documents, and cargo-readiness requirements.
  5. Notify the Other Party: Give a clear written cancellation notice referring to the relevant charterparty clause and the basis for cancellation.
  6. Reserve Rights: If damages may be claimed, reserve the right to pursue claims arising from any separate breach.
  7. Document Everything: Preserve emails, notices, ETA updates, port records, agents’ messages, inspection reports, and fixture correspondence.
  8. Consider Substitute Arrangements: If cargo must move, Charterers should consider replacement tonnage while avoiding steps that prejudice their rights.
  9. Fulfill Remaining Obligations: Cancellation may not remove all obligations, such as payment of accrued expenses, bunkers, agency costs, or settlement of existing liabilities.
Because cancellation can have serious commercial consequences, the decision should be made only after careful review of the contract and facts. A valid cancellation can protect Charterers from a late ship. An invalid cancellation can expose the cancelling party to damages.

Anticipatory Cancellation and Commercial Uncertainty

A recurring issue in charterparty practice is whether Charterers can cancel before the cancelling date when it is obvious that the ship will be late. In many cases, the answer is no unless the contract expressly allows it. The cancelling clause gives a contractual option that matures at the cancelling date. Before that point, Shipowners may still have the opportunity, however unlikely, to perform.

This creates commercial uncertainty. Charterers may need a ship immediately and cannot wait until the cancelling date to protect their cargo program. Shipowners may not want to spend money sending a late ship toward the port if Charterers will cancel. Modern or amended clauses try to solve this by allowing Shipowners to ask for a decision or by fixing a revised cancelling date after a delay notice.

Where no such mechanism exists, the parties may negotiate an agreed termination. That is often the most efficient commercial solution when everyone knows the ship cannot meet the cancelling date. However, if one side wants to keep the contract alive because the market has moved in its favour, agreement may not be possible.

Readiness for Loading and Notice of Readiness

Readiness for the cancelling clause and readiness for a valid Notice of Readiness (NOR) are connected but not always identical. For a valid NOR, the ship must normally be an arrived ship, physically and legally ready, and capable of commencing cargo operations. For the cancelling clause, the wording may require readiness to load, readiness whether in berth or not, readiness at port, or readiness at a particular place.

If the ship reaches the loading port before the cancelling date but has a defect preventing loading, Charterers may argue that the ship is not ready. Examples may include contaminated holds, defective cargo gear, missing certificates, quarantine issues, lack of class status, crew deficiencies, or inability to comply with port requirements. Minor defects that do not affect loading may not justify cancellation, while material defects may do so.

Whether a valid NOR has been tendered may be strong evidence of readiness, but it is not always conclusive. Charterers may challenge the notice if the ship was not truly ready. Shipowners should therefore ensure that the ship is physically, legally, and operationally prepared before relying on readiness to defeat a cancellation right.

Damages After Cancellation

Cancellation ends the charterparty in accordance with the cancelling clause, but damages require more. Charterers may recover damages if Shipowners breached a separate obligation and that breach caused loss. Common examples include inaccurate ship position, unreasonable expected readiness, failure to proceed with due dispatch, failure to give required notices, or failure to deliver the ship in the agreed condition.

The damages assessment usually asks what position Charterers would have been in if Shipowners had performed the relevant obligation properly. If Charterers would have fixed substitute tonnage earlier, avoided storage costs, protected a sale contract, or avoided deadfreight exposure, those losses may be considered depending on causation and remoteness.

Shipowners may also have claims if Charterers wrongfully cancel. If Charterers cancel before the right has arisen, or cancel when the ship was in fact ready, Shipowners may treat the cancellation as a breach and claim loss of freight, deadfreight, repositioning costs, or other recoverable loss. The commercial stakes can be substantial.

Practical Checklist for Charterers

  1. Record the agreed laycan and cancelling date precisely.
  2. Monitor the ship’s ETA and request updates if delay appears likely.
  3. Check whether the charterparty allows early cancellation or requires waiting until the cancelling date.
  4. Review any Shipowners’ notice asking whether Charterers will cancel or continue.
  5. Calculate response deadlines carefully, including hours, days, and time zones.
  6. Assess whether substitute tonnage is needed before cancellation can be exercised.
  7. Make any cancellation notice clear, written, and clause-specific.
  8. Reserve rights if a separate damages claim may exist.
  9. Preserve evidence of cargo commitments, replacement fixture costs, delay losses, and communications.

Practical Checklist for Shipowners

  1. Confirm whether the ship can realistically meet the cancelling date.
  2. Give accurate and timely ETA updates if required by the charterparty.
  3. Use any contractual mechanism allowing Shipowners to request Charterers’ decision.
  4. State the revised expected readiness date honestly and with reasonable grounds.
  5. Avoid assuming Charterers will cancel merely because the ship is late.
  6. Continue performance unless the charterparty has been cancelled or the parties agree otherwise.
  7. Keep records showing due dispatch, weather delays, port delays, mechanical issues, and communications.
  8. Check whether the ship is ready in the contractual sense before tendering readiness.
  9. Consider the cost of proceeding to the load port against the risk of breach if the ship is not sent.

Conclusion: Cancelling a Charterparty Requires Timing and Precision

Cancelling Charterparty issues are common when a ship cannot reach the agreed place or become ready within the laycan. The cancelling clause gives Charterers an important protection, but it must be exercised correctly. The right to cancel does not usually arise simply because delay is expected. It normally arises when the ship is not ready by the agreed cancelling date, unless the contract contains a mechanism for earlier decision-making.

Shipowners should not assume that a late ship will be rejected, particularly in a rising market. Charterers should not assume they can cancel early simply because the ship will probably miss the date. Both sides must read the cancelling clause carefully, follow notice requirements, preserve evidence, and distinguish the right to cancel from any separate claim for damages. In charterparty practice, cancellation is not only a legal remedy; it is a commercial decision that must be made at the correct time and in the correct form.