Legal Definition of Laytime And Demurrage

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Legal Definition of Laytime and Demurrage

By

S J Tubrazy

The term ‘Lay Day’ or Laytime is defined in the Black’s Law Dictionary as:

“In the law of shipping, days allowed without penalty to charter party for loading and unloading the cargo. ”

And the definition as contended in the Marine Time Encyclopaedic Dictionary (3rd Edition, 1992) by Eric Sulivan, it has been defined to mean;

Time allowed by the ship owner to the voyage charter or bill of lading holder in which to load and/or discharge the cargo. It is expressed as a number of days or hours or as a number of tons per day. There is normally a provision in the charter party for the commencement of laytime, which is often at a certain hour after notice of readiness has been tendered by the master, a provision for periods when laytime does not count, for instance during bad weather, week-ends or holidays and a provision for laytime being exceeded, when demurrage or damages for detention become payable, or no being fully used, when dispatch money may be payable”.

And the word demurrage as understood in the maritime, is defined in the Black’s Law Dictionary to means:       

“in maritime law, the sum which is fixed by the contract of carriage or which is allowed, as remuneration to the owner of a ship for the detention of vessel beyond the number of days allowed by the charter party for loading and unloading or for sailing also the detention of vessel by the freighter beyond such time Demurrage is extended freight and is the amount payable for delays by receiver in loading or unloading cargo. It is stipulated damages for detention. ”

Demurrage, as per Marine Encyclopedic Dictionary means:

“Amount of money paid to the ship owner by the charters, shipper or receiver, as the case may be, for failing to complete loading and/or discharging within the time allowed in the voyage charter party. The rate of demurrage, normally an amount per day or part of a day, is agreed in the charter party. Some charters specify that, after a certain period of demurrage, either additionally demurrage or damages for detention become payable. When demurrage becomes payable, it is said of a ship that she is on demurrage. Once a ship is on demurrage, no deductions are made for excepted periods, such as week-ends, in the calculation of the demurrage charges; hence it is said once on demurrage, always on demurrage.

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