Ship Misdescription in Charterparty

If the vessel is not correctly described by owners at the time the charter is entered into, charterers may, depending upon what is misdescribed and its importance in the context of the contract negotiations, reject the vessel and thereby treat the charter as terminated. When considering the legal position, which arises when the vessel is misdescribed, it is necessary to distinguish between two alternative remedies that may be available to charterers. At common law charterers have the following rights: If the term of the charter, which has been breached, amounts to a ‘condition’, charterers can refuse delivery or they may terminate the contract, provided they act promptly upon discovering the misdescription. ‘Condition’ has a special legal meaning in the present context. Whenever any term of the charter is breached, the innocent party is entitled to claim damages. Only in certain circumstances may he also have the right to treat the breach as a repudiation of the charter and to elect to bring the charter to an end. Whether or not this latter right will arise depends upon the importance of the term, which has been broken, and for this purpose contractual terms fall into three classes:

  1. conditions
  2. warranties
  3. intermediate terms.