Charterparty Misdescribing Ship

Charterparty Misdescribing Ship

As a general rule the details provided by way of a description of the ship will form a part of the charterparty contract.

Therefore, if the ship does not comply with the description given then the charterer will be entitled to claim damages for losses which arise as a result of the Shipowners’ breach of contract in misdescribing the ship.

Furthermore, if the description of the ship induced the charterer to enter into the contract, the charterer may also be able to argue that the Shipowners had misrepresented the ship to the charterer and thereby claim damages for misrepresentation.

In general the words used in the charterparty to describe a ship are not simply representations but form the terms of the charterparty. Therefore, if the ship does not comply with the description given of her and the charterers suffer loss they will be entitled to claim damages.

In addition, if the Charterparty Misdescribing Ship is held to be a condition, that is an important term of the charterparty, then the charterers may be entitled to terminate the charterparty, if the ship does not meet the warranted description.

The approach of the courts in recent years has been to look at the description given and consider its overall impact on the workability of the contract. So, a minor variation in the warranted performance of the vessel, for example in relation to speed, may give rise to a claim for damages but would not entitle the charterers to terminate the charterparty.

On the other hand a substantial misrepresentation of the ship’s performance, particularly where it is known that the vessel is to be engaged on a liner service and required to meet schedules, may be considered to be a major breach of the charterparty and give rise to a right to terminate the charterparty and claim damages.