Terms. The essence of any contract, for example, a contract of carriage, is that each party to the contract has certain obligations to the other.
Most disputes concerning all contracts are connected with performance of the obligations created by the contract. The consequences of the breach of these obligations become important to business people who are involved with the shipping industry and to their legal advisers because, inevitably, legal advisers become involved. In addition to the legal advisers, insurers and providers of cover for liabilities become involved, such as the P. and I. Associations. Some obligations from one contract may be incorporated into another contract; for example, the obligations under a charterparty may be incorporated into a bill of lading. All the obligations can be called “terms” and they can be classified in a number of ways. For example, a contractual relationship between two parties may be subject to express terms, written in the document of the contract, or implied terms, imposed by the courts. The classification of the obligations or terms can also vary between a condition, an innominate term and a warranty, each with a different nature.
Many cases connected with shipping and chartering have influenced the classification of terms and the entire law of contract.