Ship Masters should be cautious for unwanted contracts

Ship Masters should be cautious before signing documents. It is a common practice for masters to sign various agreements that will bind shipowners. In many instances the agreements are presented under time constraints, or late at night. Ship master may not understand the legal content, but he may feel that he has no option but to sign, to follow through with his orders. It would then come as a nasty surprise if shipowners were later to discover that their master had unwittingly waived their statutory right to limit liability for damages. That could leave them in a difficult position, with their insurance cover voided and a bill for unlimited damages. Latest incident occurred between owners of Cape Bari and Bahamas Oil Refining Company International (BORCO). Bahamas Oil Refining Company International argued that by agreeing to clause 4, the owners had contracted out of their right to limit liability. No matter how urgent, the master should always refer contracts back to the operator’s legal team for review before signing. If that is not possible, the master should be guided to execute agreements on the basis of “receipt only and without authority to bind the owners or the vessel”.may serve to avoid binding shipowners to unwanted contracts.