Misrepresentation of a ship in Charter Party

The Misrepresentation Act 1967 provides a remedy of cancellation for misrepresentation. However, it should be understood that this statutory right is, except in the case of fraudulent misrepresentation, a discretionary remedy, the court or arbitrators having power to award damages in lieu of cancellation. In order to be able to claim a remedy for misrepresentation under this Act, the following must be established:

(a) The representation must be one of fact. This can include a representation as to a party’s state of mind, such as his intentions or expectations. If a party represents that a vessel will be in a certain position by a certain time, he is not representing that his expectation will necessarily be fulfilled, but that it is made in good faith. He may also be taken to have impliedly represented that his expectation was based on reasonable grounds;

(b) The representation must be material, in the sense that it is likely to be relied upon by the charterers in deciding whether to enter into the charter, or upon what terms; and

(c) Charterers must in fact have relied upon the representation.

(d) A ship broker cannot be liable under the Act (The SKOPAS 1983), but he could still be liable at common law for negligent misrepresentation. 

A statement in the charter as to the vessel’s class is usually a condition (The APOLLONIUS 1978). The description of the vessel’s class does not guarantee that:

1) the vessel is correctly classed by the Classification Society; nor

2) that she will remain in class.