Implied terms. In contracts, including charterparties, the extent and scope of the agreement is contained in “terms” which cover the obligations and responsibilities of the parties.
These terms can be written into the contract document (“express terms”) or can be considered or presumed to be pan of the agreement without being express (“implied terms”). Terms can be implied into agreements by the practice of a trade, or by legislation or by judges or arbitrators if a dispute proceeds to litigation or arbitration. An example of a custom or usage of a trade being excluded by implication was the early case, Les Affreteurs Reunis v.
Walford, 1919, where, although it was customary for a shipbroker only to be paid commission out of time charter hire that was earned, if the charterparty provided for commission to be paid on signing, the commission was payable whether the hire was earned or not. In marine insurance certain obligations are implied by the U.K. Marine Insurance Act 1906 into contracts of Marine insurance (“policies”). This is an example of terms being implied by legislation.
Terms are also implied into contracts by judges (and arbitrators) if the general object of the contract is clear but the contract document does not contain obvious express wards. In the early case concerning a ship, The Moorcock, 1889, a wharf owner entered into a contract with a shipowner for the ship to discharge at a wharf in the River Thames, London. Because of the flow of the tide, it was clear that at some time the ship would touch the river bottom. The ship did move downwards as the water ebbed and did touch the bottom. The bottom was partly hard and the ship was damaged. The wharf owners did not admit that the berth was safe, nor did they own the riverbed. However, the English court decided that the wharf owners had impliedly undertaken that the berth was completely safe. It should be stated that this is tin wide so the English courts have restricted the influence of the test before an obligation is implied into a contract. A term will only be implied if it is so obvious that it goes without saying that the term is included in the contract.
In chartering, and in charterparties, many terms are implied. At “common law” there are many implied obligations in any contract to carry goods by sea. Some are even excluded by legislation. For example, the implied undertaking of a carrier to provide a seaworthy ship is cancelled by the U.K. Carriage of Goods by Sea Act 1971, section 3 of which states:
“There shall not be implied in any contract for the Carriage of goods by sea . . . any absolute undertaking by the carrier of the goods to provide a seaworthy ship.”
Some implied terms can be reinforced by express terms. For example, the implied obligation of seaworthiness is confirmed in the NYPE time charterparty. The ship must be in a thoroughly efficient
state, when the charter is made; it must be tight, staunch arid strong, etc., when delivered to the charterers; and must be kept in a thoroughly efficient state fog and during the entire charter period.
In all contracts for the carriage of goods by sea some obligations have been implied for many years and remain so unless they are excluded by legislation or express agreement. These include, among others:
seaworthiness; the voyage is to be commenced and carried out with due diligence and with reasonable despatch; the ship must not deviate unjustifiably during the voyage; the Charterer must nominate a safe port to which the ship is ordered; and, the Charterer or shipper must not ship dangerous goods without warning the carrier.
