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THE AWESOME NOTES 1 of 8

COMMERCIAL LAW
MARITIME COMMERCE

CHARTER PARTIES
CLASSES OF CHARTER PARTY

BAREBOAT OR DEMISE
the charterer provides the crew, food
and fuel.
CHARTER PARTY CONTRACT OF - the charterer is liable for the
AFFREIGHTMENT consequences of the voyage as if he
were the owner
a contract by which owner of a ship or EXE: when the liability arise
an entire ship, or other vessel lets the from the unseaworthiness of
some principal part
thereof is let by the
owner to another
whole or a part of
her to a merchant or
other person for the

the vessel

* entire surrender by the owner of the


person for a conveyance of vessel to the charterer, who provides
specified time or use goods, on a the officers and the provisions.
particular voyage, in - hence, in case of damages, the
consideration of the liability ordinarily due to the shipowner

2 KINDS
payment of freight.

hire is for the vessel



shall be borne by the charterer

* OWNER PRO HAC VICE: charterer


1. contract of only or space will generally be considered as owner
affreightment;
2. demise or
bareboat charter

thereof

may be either:
for the voyage or service or purpose


stipulated.

1. time charter; or REQ:


2. voyage charyer the owner of the vessel myst

IN RE: DEMISE OR completely and exclusively relinquish


possession, command and navigation
B A R E B O A T
CHARTER thereof ti the charterer.
- anything short, it is a contract of
owner retains
possession,
command and

affreightment

navigation of the TIME CHARTER


ship the vessel is chartered for a period of
time or duration of the voyage.
common carrier is - the charterer acquires the right to use
not converted to a the carrying capacity, facilities of the
private carrier vessel and he could designate the
destination.
charterer is not HOWEVER
liable for damages in the owner retains possession
general

required to exercise required to exercise



and control of the vessel

VOYAGE OR TRIP CHARTER


extraordinary ordinary diligence to the condition of the charter are the
dlegence provide for the same as in time charter.
berthing space for - it is a contract for the hire of a vessek
loading and for one or series of voyage usually for
unloading the purpose of transporting goods for

governed principally
by their stipulations
governed by rules
for common carriers

the charterer

IN RE: LIABILITY
- it is usual for the parties to provide
that responsibility for cargo loss shall
NOTES:
falls on the one who agreed to perform
where the bill of lading has been issued
covering goods shipped aboard the vessel
under a charter party, and the charterer

the duty involved.

R I G H T S A N D O B L I G AT I O N S O F
remains the holder of bill of lading
CHARTERER
- the bill of lading operates as a receipt of the
1. to pay the agreed charter price
goods and as a document of title passing the
2. to pay freightage on unboarded cargo
property of the goods,
3. to pay losses to others for loading
but not as a contract of carriage in a
uncontracted cargo and illicit cargo
charter of the entire vessel
4. to wait if the vessel needs repair; and
5. to pay expenses for deviation

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THE AWESOME NOTES 2 of 8
COMMERCIAL LAW
MARITIME COMMERCE


NOTE: the rights and obligations of the
for the portion of the ship's capacity
the latter contracted for
parties are determined primarily by
stipulations in their contract of private
- but failed to occupy


carriage or charter party. PRIMATE
bonus to be paid to the captain after


IN RE: RISK OF LOSS

GEN RULE:

successful voyage

LAY DAYS
the merchandise shall be transported at the period when vessel will be delayed in port for


risk and venture of the shipper,

loading and unloading

EXE:
if the contrary has not been expressly
RESCISSION OF CHARTER PARTY


stipulated.

DEMURRAGE
GROUNDS
1. at the request of the charterer
2. at the ship owner's request
is the sum fixed in a charter party as a
remuneration as a renumeration to the owner
of the ship for the detention of his vessel

3. fortuitous causes

AT THE REQUEST OF CHARTERER


- beyond the number of days allowed either by:
by the charter party for loading or 1. by abandoning the charter and

unloading or for sailing paying half of the freightage


(unilaterally; as distinguish from


*available only if expressly stipulated

as to determination of lay days, it may


contract of lease which cannot be
unilaterally terminated by one
party)
be either a fixed laydays or couched in 2. error in tonnage or flag
an indefinite words such as customary 3. failure to place the vessel at the


quick dispatch

customary quick dispatch


charter's disposal
4. return of the vessel due to pirates,
enemies or bad weather; and
- loading and unloading of cargo
should be within a reasonable period
of time.

5. arrival at port for repairs.

for #5
- due diligence should be exercised - if the repairs take less than
according to the customs and usage of 30 days; pay full freightage for


the port or ports of call

demurrage/dispatch: NONE
voyage out
- if exceeds 30 days;
freightage must be paid in
- means as a waiver to claim for proportion to the distance


demurrage

D E L AY I N L O A D I N G A N D
covered.

AT THE SHIP OWNER'S REQUEST


UNLOADING TO BE DEEMED AS either due to:
DEMURRAGE; when 1. if the extra lay days terminate
the delay runs against the charterer as without the cargo being placed
soon as the vessel is detained for an alongside the vessel (failure to
unreasonable length of time from the load); and
arrival of the vessel 2. sale by the owner of the vessel
- because no available berthing space
was provided for the vessel
due to the negligence of the

before loading by the charterer

the buyer is only bound to the


charterer or charter party
by reason of circumstances caused - when the new owner does

by the fault of the charterer

interest rate for demurrage


not have any cargo to load on
the vessel.
- second distinction from
- since it is an obligation not arising ordinary lease contract, kasi in
from loan or forbearance of money lease, if the buyer is aware, he


legal rate: 6%, in the absence
of stipulation

must respect it.

DEADFREIGHT
is the amount paid or recoverable from a
charterer of a ship

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THE AWESOME NOTES 3 of 8
COMMERCIAL LAW
MARITIME COMMERCE

FORTUITOUS CAUSES from liability by abandoning the vessel to


1. war
2. blockade
3. prohibition to receive cargo

the creditors

NOTE:
4. embargo; and abandonment of the vessel includes
5. inability of the vessel to navigate the ff objects
a. the vessel itself
b. equipments
c. freightage; and
LIABILITIES OF SHIP OWNERS
AND SHIPPING AGENTS d. insurance

note: abandonment only becomes

PRELIMINARY essential if there is no total loss.

MARITIME LIEN ON THE VESSEL


SHIP OWNER; defined the persons who has lien over the vessel are
is the person who has possession, control and
management of the vessel and the consequent
right to direct her navigation and receive the

the ff:

any person furnishing repairs, supplies,


freight earned and paid, while his possession towage, use of drydocks, or marine railway,


continues.

if there are several co-owners


or other necessaries, to any foreign or
domestic vessel
ON THE ORDER OF
- partnership is presumed; to be 1. the owner of such vessel, or
governed by the rule of the majority- 2. of a person authorized by the
the-co-owner with the smallest share
being entitled to 1 vote, and the others,
that number of votes in proportion to

NOTE
owner.


the smallest.

SHIP AGENT; defined


bank which pays off the debt of the
shipowner to a repair facility, becomes
the transferee of all the rights of said
is a person entrusted with provisioning and facility as against the shipowner,
representing the vessel in the port in which it


may be found
including its maritime lien

also; those who provide credit to a master of


NOTE: a vessel for the purpose of discharging a
ship agent includes ship owner
is solidarily liable with the owner of
the vessel for losses or damage to

maritime lien

*lien may be enforced by an action in

the cargo

LIMITATION OF AUTHORITY OF A

ren

MARITIME LIEN
SHIP AGENT constitutes a present right of property in the
1. cannot order a new voyage ship, a jus in re, to be afterward enforced in
2. cannot make a contract for a new admiralty process in rem, it relates back to the
charter
3. cannot discharge a captain or a
crew member appointed by him for

period when it first attached

R I G H T S A N D O B L I G AT I O N S O F
a definite period or voyage, exe for SHIPOWNER AND SHIP AGENTS
cause 1. if the vessel is chartered wholly; not to
4. cannot discharge a captain who us accept cargo from others
a co-owner, and who become a 2. to observe represented capacity
captain by virtue of a special 3. to unload cargo clandestinely placed

agreement contained in the article 4. to substitute another vessel if load is less


than 3/5 of capacity
5. to leave the port if the charterer does not
CIVIL LIABILITY OF SHIP AGENT AND/OR bring the cargo within the lay days and
SHIPOWNER extra law days allowed
shall extends to 6. to place the vessel in a condition to
1. all contracts of the captain, whether navigate, otherwise freightage lost; and
authorized or unauthorized, to repair, equip 7. to bring cargo to nearest neutral port in
and provision the vessel.
2. loss and damage to the goods loaded on
the. vessel without prejudice to the ship
case of war or blockade

owner or ship agent freeing themselves

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THE AWESOME NOTES 4 of 8
COMMERCIAL LAW
MARITIME COMMERCE

LIMITED LIABILITY LIABILITY FOR ACTS OF


CAPTAIN
AKA: HYPOTHECARY RULE


no vessel, no liability

CONCEPT:
NATURE OF LIABILITY
solidarily liability of the shipowner and ship
agent with the ship captain who is at fault, over
the shipowner's or agent's interest is merely the ff acts
co-extensive with his interest in the vessel 1. damage to vessel and to cargo due to lack
(including the freight) such that a total loss of skill and negligence


thereof results in its extinction.

EXE: WHEN LIMITED LIABILITY RULE


2. thefts and robberies of the crew
3. losses and fines for violation of laws
4. damages due to mutinies
DOES NOT APPLY 5. damages due to misuse of powers
1. where the vessel is insured 6. for deviations
2. where the claims are under Workmen's 7. for arrival under stress
Compensation aw or similar labor laws 8. damages due to non-observance of marine
3. repairs on the vessel before its loss
4. injury or damage due to the shipowner's
fault or to the concurrent negligence of the
regulations

shipowner and the captain

NOTE: even if it is due to captain's fault only,


without any concurrence by the shipowner, he
may still be held liable and such liability shall
not be hypothecated by abandonment or total
loss of the vessel
- when the liability is for the loss of life of


passenger.

RATION:
this is governed by civil code and not
by code of commerce.
- thus, extraordinary diligence is
mandated of him, and the negligence
of his agent will make him directly


NOTES:
liable.

when the ship is unseaworthy, the shipowner


is always presumed negligent; since it is
tasked with the maintenance of the vessel
monsoon rains not considered as fortuitous
event; as it is a seasonal occurrence and
could have been foreseen and prepared fir
shipowner is likewise presumed to be at fault
when the vessel lacks proper equipment and
the officers and crews lack proper training
ALSO; limited liability does not apply when
the vessel was used as a collateral, and the
same was uninsured by the mortgagor when
it sank. as the mortgagor has the duty to

insure it.

SEAWORTHY; defined
adequately equipped for the voyage and
manned with sufficient number of competent


officers and crew



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THE AWESOME NOTES 5 of 8
COMMERCIAL LAW
MARITIME COMMERCE

GROSS OR GENERAL AVERAGE


ACCIDENT AND DAMAGES IN all damages and expenses which are
deliberately cause in order to save the
MARITIME COMMERCE vessel, its cargo or both at the same
time,
AVERAGE; defined
is an extraordinary or accidental expense

- from real and known risk

REQUISITES OF GENERAL
incurred during the voyage AVERAGE
- in order to preserve the cargo, the vessel or 1. common danger
both, and all damages or deterioration suffered 2. deliberate sacrifice
by the vessel, 3. success; and
from departure to the port of
destination
- and to the cargo

4. proper formalities and legal steps

RIGHTS OF THE OWNER OF


from the port of loading to the port of JETTISONED GOODS
consignment. entitled for general average, to be
reimbursed for the value of goods

CLASSES OF AVERAGE jettisoned
PA R T I C U L A R O R S I M P L E
AVERAGE

- less: portion of his cargo saved

TO WHOM HE IS ENTITLED
expenses and damages caused to the FOR REIMBURSEMENT
vessel or cargo 1. to the owner of the
- which have not inured to the common vessel; and
benefit, and 2. the owner of the goods

- borne by their respective owners

PRESUPPOSES THAT THE LOSS


which were saved as a
consequence of the
OR DAMAGE IS DUE TO
1. inherent defect of the goods
sacrifice

PROVIDED: the cargo


2. an accident of the sea jettisoned must be covered by
3. force majeure
4. negligence of the crew of the a bill of lading


ie,
carrier LIABILITY OF THE OWNERS OF THE
CARGO SAVED
will contribute to the reimbursement of
repair cost due to the negligence of the the value of the goods jettisoned and
captain. as a result of which, added to the damage suffered by the vessel.
expense for the provision of the crew,
deterioration expense for the copra
loaded on the vessel, and the towage

- less: his own share in the sacrifice

RIGHTS OF THE OWNER OF THE


cost of the vessel for it to pass the VESSEL
suez canal. is entitled to reimbursement for the
- the repair cost is simple average as it damage to the vessel resulting from
did not inure to the benefit of all, as it the fortuitous evnt
was caused by the negligence of the
captain.
- the expense for the provision is as an

- less his own share of the sacrifice

NOTE:
incident of the delay in the repair of the once the ship master declare for the
vessel. since this expense is as a jettison of cargos after the all the
consequence of the repair, it is requisite condition for general average
therefore a particular average to apply are present,
- the deterioration of value is a - no particular shipper can refuse such
particular average, borne by the copra
owner
- the towage expense is likewise a

declaration

PROCEDURE IN GENERAL
particular average, since it was AVERAGE
incurred as an incident of navigation, 1. before the loss is caused or the

to be borne by the owner.

TEST: if both vessel and cargo are


expense incurred, the captain
must call a meeting of the officers
and any cargo owner who may be
saved, it is general average. but if only on board
either of one is saved, it is only a 2. they shall decide by voting, but the

particular average. (?)
captain shall have the final vote.

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THE AWESOME NOTES 6 of 8
COMMERCIAL LAW
MARITIME COMMERCE

HENCE; absence of call from the ARRIVAL UNDER STRESS; defined


captain, it is only treated as a is an arrival of the vessel at a port not the
particular average. any jettisoned destination on account of
cargoes shall be borne by the owner 1. lack of provisions,


thereof.

ORDER OF JETTISON OF
2. well-founded fear of seizure,
3. privateers, or
4. by reason of any accident of the sea
CARGOES
1. those on deck, and in the lower
deck

disabling it to navigate

WHEN NOT JUSTIFIED


2. those of bigger bulk and smaller 1. the lack of provision us due to

value

Q: when does an expense to put the


failure to carry the provisions
necessary according to usage and
customs


vessel afloat a general average?

A: if the vessel was intentionally


2. the risk of enemies is not well-
known and manifest
3. the defector the vessel us a
stranded to save it and its cargo. consequence of an improper
- otherwise, a particular average, repair; and
especially so where the stranding is a 4. m a l i c e , n e g l i g e n c e , l a c k o f


consequence of an accident

IN RE: CONTRIBUTION TO
foresight, lack of skill of the
captain caused the damage

LIABILITY, RELATE TO YORK- WHO BEARS EXPENSES


ANTWERP RULES

IN CASE OF OVERSEAS TRADE



the shipowner

HOWEVER; when arrival under stress


prohibits the loading of cargo in deck is not lawful
or even container. - the shipowner shall likewise bear for
- in case such cargo is jettisoned, the the damages suffered by the
owner thereof will not be entitled to
reimbursement
passenger and the cargo owner.

in view of the violation. COLLISIONS; defined


the impact of 2 vessels, both of which are
and if the cargo is saved, it must


contribute to the general average
moving

CONTRA:
IN CASE OF INTER-ISLAND TRADE ALLISION; defined
deck cargo are allowed. is an impact between a moving vessel
- hence, if t is jettisoned, it is entitled to


reimbursement
and a stationary one

if saved, it must contribute to general


ZONE OF TIME IN COLLISION


average. FIRST ZONE;
covers all the time up to the moment
R AT I O N O F Y O R K -
ANTWERP RULE
an inter-island trade, voyage is

when the risk of collision begins

SECOND ZONE;
usually short and there are the time between the moment when
intervening island and the the risk of collision begins and the
seas are by far generally not moment it becomes a practical
rough
- while overseas trade are
exposed to a greater risk, and

certainty

THIRD ZONE;
deck cargo is dangerous for the time when collision is certain and


navigation, and therefore
prohibited
the time of impact

ERROR IN EXTREMIS
a sudden movement made by a
faultless vessel during the 3rd zone of
collision with another vessel which is
at fault during the 2nd zone.
- i n h e r e , e v e n i f th e s u d d e n
movement was wrong, no
responsibility shall fall on said faultless
vessel

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THE AWESOME NOTES 7 of 8
COMMERCIAL LAW
MARITIME COMMERCE


RULES AS TO LIABILITY

ONE VESSEL AT FAULT


PREREQUISITE TO RECOVERY
any action for damages arising from
collision should be preceded by a
owner of the vessel at fault during the second
zone and the ship agent
- are solidarily liable to the owner of the

protest.

MARITIME PROTEST
innocent vessel and to the cargo owners for all - is a written statement made under


of their losses and damages.

BOTH VESSEL AT FAULT


oath by the captain or master of the
vessel,
after the occurrence of an
as for the damage to the vessel, each shall accident or disaster in which


bear their own loss

for damage to the cargos of both vessels;


the vessel or cargo is lost or
damaged with respect to the
circumstances attending such
- the ship owner and ship agent of both
vessels shall be solidarily liable to the owners
occurrence.


of the cargo.

FAULT UNDETERMINABLE
TIMEFRAME
WITHIN 24 HRS
- before the competent authority at the


apply: doctrine of inscrutable fault

same liability when collision is due to the fault


place where the accident or disaster
happened or at the first port of arrival,
in the Phil, or to the Phil consul, if the


of both vessel

NOTE:

incident took place abroad.

NOTE:
DOCTRINE OF LAST CLEAR CHANCE DOES injuries to persons and damage to
NOT APPLY IN COLLISION OF VESSELS cargo of owners not on board on
- as the law on admiralty states that in case collision time, need not be protested.
collision is due to the fault of both vessel or - dito bale, pag hindi on board yung
when it cannot be determined who is at fault, shipper at the timeof the collision, it
by applying doctrine of inscrutable fault, cannot file a protest even though part
neither can successfully maintain a claim of his cargo was damaged due to the
against each other for the loss or damage to
their respective vessel. nor in case of error in
extremis of a faultless vessel would not make it

said collision.

The person who can only file for


liable to other vessel. maritime protest is the master or
captain of the vessel involved in the
IF BOTH VESSELS ARE NEGLIGENT
- it doesn't matter which one is the proximate
collision.


cause and which is contributory.

COLLISION DUE TO FORTUITOUS EVENT


IN RE: SHIPWRECK
the only time the captain can be held liable by
the owner of the vessel for indemnity is
provided that there is no fault to either or both - when it is due to its malice,
of the vessel
- each vessel and each cargo owner will bear
negligence or lack of skill.


their respective damages

IF CAUSED BY A THIRD VESSEL


PRESUMPTION OF LOSS


- if the vessel sinks and cannot be salvaged


- the third vessel shall be liable.

COLLISION OF A MOVING VESSEL


NOTES
in case of negligence or fault of the pilot
- it will not exempt the shipowner or the ship
AGAINST A STATIONARY OBJECT
PRESUMPTION OF FAULT
- against a moving vessel that strikes a

agent from liability

the existence of pilotage, the master does not


stationary object (ie. docks or navigational aid)

TO OVERCOME PRESUMPTION
surrender his vessel to the pilot, and the pilot is
not the master
- the master still commands the vessel
must exhaust every reasonable possibility
which the circumstances admits and show that
in each, they did all the reasonable care

notwithstanding the presence of the pilot.


required.

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THE AWESOME NOTES 8 of 8
COMMERCIAL LAW
MARITIME COMMERCE

IT SHALL BE COUNTED EITHER


CARRIAGE OF GOODS FROM:
actual receipt of the shipper
BY SEA ACT directly delivered upon the
consignee
upon delivery of the goods to the
APPLICABILITY: arrastre operator, and not upon the
in carriage of goods from foreign ports to the


Philippines
consignee

hence, supposing na receive ni



NOTICE FOR LOSS OR DAMAGE

WHEN IT MUST BE GIVEN


arrastre yung damagd goods, but he
neither file a claim nor notify the
owner. and did so only after the
if the damage is extremely apparent; the expiration of the 1 year period
notice of the damage should be given on the - basta, in this instance, the consignee
receipt of the goods and/or the shipper has 2 year
if the damage is not extremely visible; then prescriptive period. or an additional
within 3 days from receipt

NOTE:
one year counted from the expiration
of the period within which the arrastre
failure to give a notice will not bar the
filing of the suit

should have filed a claim.


- if such is made within 1 yr

stipulation in the bill of lading requiring


AMOUNT OF LIABILITY
THE LIABILITY LIMIT IS SET AT
$500 per package; or
that notice of damage must first be the actual amount of the loss sustained; if
filed before one can file a claim for
damages
- is null and void stipulation.
with declared value

THIS: is deemed incorporated in the bill of


- COGSA; lack of notice is not a bar to
the filing of a suit for damages within 1
lading even if not mentioned in it.


year from receipt of the cargo.

likewise, null and void stipulation


NOTE:
in case of transshipment, the original carrier is
liable for any liability even if connecting carriers

reducing the 1 year prescriptive period. intervened,
this is without prejudice to the original

IN CASE OF LOSS

COGSA DEFINE LOSS; as


carrier's right to recover from the
connecting carrier.
- this also applies in contract of
where there is no delivery at all was carriage of passengers.
made by the shipper of the goods
because the same
1. had perished
2. gone out of commerce
3. disappeared in such a way that
their existence is unknown or they

cannot be recovered

IT DOE NOT INCLUDE


- misdelivery

hence; in case of misdelivery,


the one year period does not
apply.
- no maritime hazard, in which
the one year period is made to


apply to meet its exigencies.

10 YEAR PRESCRIPTIVE


PERIOD

PRESCRIPTIVE PERIOD
1 YEAR
after the delivery of the goods or the date


when the goods should have been delivered.

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