American Doctrine

Some forms of Clause Paramount incorporate the entire 1924 Act or its foreign equivalent; other forms incorporate only certain parts of the Rules. In some cases the use of the word Paramount merely indicates that the rules are intended to override only some of the express terms in the contract. In Marifortuna Naviera S.A. v Government of Ceylon (1970) it was held that the exceptions in the Rules did not exclude the shipowners liability for a breach of a particular term concerning notice of readiness. The Carriage by Sea Act, 1971 does not include a requirement for a clause paramount. However there may be circumstances where neither the Hague Rules nor the Hague-Visby Rules will apply, so that it is still necessary to include a clause paramount for contractual reasons. A Jason clause was introduced into contracts for the carriage of goods by sea to circumscribe the effect of decisions of the Courts of the United States in the context of a principle of public policy of that country, which was never recognized by the English common law. The Courts of the United States held that it was contrary to public policy for a sea carrier to seek to exclude liability for negligence or unseaworthiness by contractual terms and that any contractual provision which purported to do this was void and of no effect. The American doctrine was modified by the U.S. Harter Act 1898 section 3 of which entitled sea carriers to a limited exemption from liability for negligence in the navigation and management of the ship. In The Irrawady (1897) the U.S. Supreme Court decided that the exemptions permitted by the Harter Act were only available as a shield by way of a defence to a claim against shipowners but did not enable the owners to pursue their own claims for a general average contribution when the general average act had been caused by negligence for which they would have been responsible apart from the exemption. In order to meet this problem, a clause was incorporated expressly declaring that a shipowner could recover in general average in the event of negligence, provided that due diligence had been exercised to make the ship in all respects seaworthy.