Effects of Ship Off-Hire Clause

Many off-hire clauses include a de minimis provision and are not activated until a period of 24 or 48 hours has elapsed from the occurrence of the specified event. Once the clause operates, however, all time lost will count, including the initial 24 or 48 hours.

In the absence of provision to the contrary, the suspension of the obligation to pay hire under this clause does not relieve the charterer of his other obligations arising under the charterparty during that period, for example his obligation to pay for bunkers or other port services during the off-hire period, or to pay the crew for overtime.

Occasionally the clause will give the charterer an option to extend the charter for an equivalent period but, since such a provision can be unfair to owners on a rising market or where subsequent charters have already been arranged, it is more normal practice to require the off-hire period to be counted as part of the basic charter term.

Should the off-hire event arise from breach of an owner’s warranty, or some other act or neglect not covered by the exceptions, then the charterers may also have a claim for damages in addition to their right to suspend payment of hire.