3 Historically restricted in common law jurisdictions but generally accepted elsewhere; availability varies between contemporary common law jurisdictions
The doctrine of deviation is a particular aspect of contracts of carriage of goods by sea. A deviation is a departure from the "agreed route" or the "usual route", and it can amount to a serious breach of contract.
The consequences of unjustified deviation can be very grave for the carrier, who is thereby prevented from relying upon exclusion clauses within the contract limiting his liability; nor will the carrier be able to rely on statutory protections, such as Art. IV of the Hague-Visby Rules.
The scope of deviation
The "agreed route" is identified from the contract of carriage, as evidenced by the bill of lading. The ports of origin and destination (e.g. "Piraeus to Liverpool"') define the route. The "usual route" is not necessarily the shortest route, but is a version of the agreed route, taking into account safety issues, distances, seasonal conditions and war zones. For instance, the route "Auckland to London" could be via Suez, Panama, the Cape of Good Hope, or Cape Horn, but the usual route will be identified by reference to current practice or to any previous dealings[1] of the parties.
Although a deviation is primarily a departure from the agreed route or the usual route, the concept of deviation extends beyond this. Deviation may include any unjustified delay such as remaining at authorised ports longer than necessary, or acting beyond the agreed scope of the voyage. For example, if a ship makes an authorized call at a port, but stays on to trade or break bulk, this action may amount to a deviation.
The concept of deviation has been extended (sub nom “quasi deviation”) to cover wrongful transhipment, careless stowage, and stowage in the wrong part of the ship (such as on deck, rather than below decks).[2][3][4][5][6] The consequences of quasi-deviation are the same as for ordinary deviation.
Article IV Rule 4 of the Hague-Visby Rules provides: "Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom". The Hague-Visby Rules do not define deviation, but rely on existing common law definitions. Nor do the Rules define “any reasonable deviation”, but in decided cases[citation needed] the phrase has been taken to include deviation.....
If a justified deviation is followed by an unjustified deviation, the doctrine of deviation will apply from the unjustified deviation.[7][8]
Establishing the doctrine
Deviation in carriage of goods by sea is treated as a serious breach because it undermines the carrier's prime duty to the shipper of the cargo, namely to carry the cargo to its destination will "all due despatch".[9][10]
In Glynn v Margetson (1893), a vessel was to carry a perishable consignment of Seville marmalade oranges from Malaga to Liverpool. The contract included a "liberty clause" which allowed the vessel "liberty to proceed and stay at any ports in any rotation in the Mediterranean, Levant, Black sea or Adriatic, or on the coasts of Africa, Spain, Portugal or France.." On leaving Malaga, the vessel did not head straight for Liverpool, but made her way to Burriana, 350 miles up the coast. As a result of the delay, the cargo had deteriorated by the time it reached England. The House of Lords (establishing the so-called "main purpose rule"), held that the clause, if given full effect, would defeat the main purpose of the contract and would be, in effect, an exemption clause which should be ignored. They gave the clause a limited construction, namely that the vessel could have liberty to proceed and stay only at ports reasonably close to the agreed route from Malaga to Liverpool, such as Cadiz or Lisbon.[13]
In Leduc v Ward(1882), a vessel was to voyage from Fiume (modern day Rijeka) to Dunkirk. The bill of lading gave "liberty to call at any ports in any order". She did not proceed to Dunkirk, but headed for Glasgow, and was lost in a storm near Ailsa Craig. Just as in Glynn v Margetson, the Court of Appeal held that the deviation was unjustifiable and was not permitted by the liberty clause, so the carrier was liable for the lost cargo.[14] (Had the court held that the deviation was justified, the carrier would have avoided liability as the storm would have been an "Act of God"). Even though it was accepted that the shipper had been verbally informed that the vessel might make passage to Glasgow, this evidence was not admissible, because the parol evidence rule prevents recourse to extraneous evidence when construing a written document. Using the criteria of differential bargaining strength of the parties, whereby the carrier is usually deemed to have greater bargaining power than the shipper, note that the parol evidence rule may be relaxed if a shipper seeks to rely on any verbal promises of the carrier (rather than vice versa, as in Leduc v Ward) .
The consequences of deviation
An unjustified deviation can be a serious breach of the contract of carriage, and the carrier will be prevented from relying upon any exclusion clause which limits his liability. Such clauses include the "liberty clauses" of Leduc v Ward, but in particular include the huge range of exemptions granted to carriers by Article IV of the Hague-Visby Rules.
Extending the scope of the rule
Although a shipping case, the "Main Purpose Rule" within Glynn v Margetson for a time became the basis of the common law of exemption clauses in English contract law, as shown in the case of Karsales v Wallis.[15] Here, a comprehensive and well-drafted exemption clause could not protect a car dealer who had supplied a used Buick with its cylinder head adrift. The court held that the contract was to supply a car ("a vehicle capable of self-propulsion"), so the Buick was not a "car", and the seller could not rely on a clause when there was "breach of a fundamental obligation". (Note that "breach of a fundamental obligation" seems little more than a rewording of Glynn v Margetson's"breach of the main purpose").
However, the English law of contract has progressed beyond the Karsales case. The definitive statements of the common law of contract are the Suisse Atlantique[16] and Photo Productions v Securicor[17] These two cases provide that in the event of really serious breach, or fundamental breach, whether or not an exemption clause is effective is a question of construction, not of law; so that exemption clauses may not be automatically be ignored after a fundamental breach. The common law approach has been to some extent superseded by statutory provisions, such as the Unfair Contract Terms Act 1977, as amended by the Consumer Rights Act 2015. However, although the general law of contract has "moved on", the strict rule of Glynn v Margetson is, for the time being, still central to the law of deviation.
Insurance issues
When goods are carried by sea, they are effectively insured twice. First, prudent cargo-owners (shippers or consignees) will insure their cargo, and, secondly, carriers (shipowners) will have cover for third-party liability from their P&I Club. If the carrier is responsible for causing loss or damage, the P&I Club will pay; but if the carrier can avoid liability, say, via an exemption clause or via Article IV of the Hague-Visby Rules, the cargo-owner will have to make a claim on his own insurance.
If an unjustified deviation occurs, the voyage has changed, and the insurer may be discharged from subsequent liability. Under the policy, the insurer accepts only the agreed risks. A crucial policy requirement is that the ship shall proceed to her port of destination by the shortest and safest route (or usual route), and not to make any unjustified deviation.
An unjustifiable deviation does not necessarily avoid the policy, but it may cancel any liability of the underwriters for any loss incurred after the time of the deviation; but the insurer remains bound to indemnify any losses sustained prior to the deviation. Although the insurer is discharged from subsequent responsibility, he is normally entitled to retain the whole premium.
Protection and indemnity insurance, more commonly known as P&I insurance, is a form of mutual maritime insurance provided by a P&I club. Whereas a marine insurance company provides "hull and machinery" cover for shipowners, and cargo cover for cargo owners, a P&I club provides cover for open-ended risks that traditional insurers are reluctant to insure. Typical P&I cover includes: a carrier's third-party risks for damage caused to cargo during carriage; war risks; and risks of environmental damage such as oil spills and pollution. In the UK, both traditional underwriters and P&I clubs are subject to the Marine Insurance Act 1906.
Fundamental breach of contract, is a controversial concept within the common law of contract. The doctrine was, in particular, nurtured by Lord Denning, Master of the Rolls from 1962 to 1982, but it did not find favour with the House of Lords.
Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch of marine insurance, though marine insurance also includes onshore and offshore exposed property,, hull, marine casualty, and marine liability. When goods are transported by mail or courier or related post, shipping insurance is used instead.
A charterparty is a maritime contract between a shipowner and a "charterer" for the hire of either a ship for the carriage of passengers or cargo, or a yacht for leisure.
A Himalaya clause is a contractual provision expressed to be for the benefit of a third party who is not a party to the contract. Although theoretically applicable to any form of contract, most of the jurisprudence relating to Himalaya clauses relate to maritime matters, and exclusion clauses in bills of lading for the benefit of employees, crew, and agents, stevedores in particular.
New Zealand Shipping Co. Ltd. v. A. M. Satterthwaite & Co. Ltd., or The Eurymedon is a leading case on contract law by the Judicial Committee of the Privy Council. This 1974 case establishes the conditions when a third party may seek the protection of an exclusion clause in a contract between two parties.
The Hague–Visby Rules is a set of international rules for the international carriage of goods by sea. They are a slightly updated version of the original Hague Rules which were drafted in Brussels in 1924.
The Hague Rules of 1924 is an international convention to impose minimum standards upon commercial carriers of goods by sea. Previously, only the common law provided protection to cargo-owners; but the Hague Rules should not be seen as a "consumers' charter" for shippers because the 1924 Convention actually favoured carriers and reduced their obligations to shippers.
Affreightment is a legal term relating to shipping.
Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 is a landmark English contract law decision of the House of Lords, concerning the notions of fundamental breach of contract and inequality of bargaining power.
The "Rotterdam Rules" is a treaty proposing new international rules to revise the legal framework for maritime affreightment and carriage of goods by sea. The Rules primarily address the legal relationship between carriers and cargo-owners.
Karsales (Harrow) Ltd v Wallis [1956] EWCA Civ 4 is an English Court of Appeal decision which established fundamental breach as a major English contract law doctrine. Denning LJ MR gave the leading judgment replacing the Rule of Strict Construction, which require a literal approach to the construction of contract terms.
A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment. Although the term is historically related only to carriage by sea, a bill of lading may today be used for any type of carriage of goods. Bills of lading are one of three crucial documents used in international trade to ensure that exporters receive payment and importers receive the merchandise. The other two documents are a policy of insurance and an invoice. Whereas a bill of lading is negotiable, both a policy and an invoice are assignable. In international trade outside the United States, bills of lading are distinct from waybills in that the latter are not transferable and do not confer title. Nevertheless, the UK Carriage of Goods by Sea Act 1992 grants "all rights of suit under the contract of carriage" to the lawful holder of a bill of lading, or to the consignee under a sea waybill or a ship's delivery order.
A freight claim or cargo claim is a legal demand by a shipper or consignee against a carrier in respect of damage to a shipment, or loss thereof.
Seaworthiness is a concept that runs through maritime law in at least four contractual relationships. In a marine insurance voyage policy, the assured warrants that the vessel is seaworthy. A carrier of goods by sea owes a duty to a shipper of cargo that the vessel is seaworthy at the start of the voyage. A shipowner warrants to a charterer that the vessel under charter is seaworthy; and similarly, a shipbuilder warrants that the vessel under construction will be seaworthy.
The Carriage of Goods by Sea Act 1971 is a United Kingdom Act of Parliament. It incorporates into English Law the Hague-Visby Rules which are to be found as the Schedule to the Act. The Act does not use the term "Hague-Visby Rules" as such; instead, the Rules are referred to in that Act as the "Hague Rules As Amended".
The law of carriage of goods by sea is a body of law that governs the rights and duties of shippers, carriers and consignees of marine cargo.
Grant v Norway (1851) is a case on the Law of Carriage of Goods by Sea; but since 1992 it has no longer been good law.
Glynn v Margetson is an English case on the law of carriage of goods by sea which established the "Main Purpose Rule" in relation to deviation.
Leduc v Ward is a leading English case on deviation within the law of carriage of goods by sea. The case also addresses bills of lading, and the parol evidence rule.
↑ Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361
↑ Photo Production v Securicor Transport [1980] AC 827
This article incorporates text from A Law Dictionary, Adapted to the Constitution and Laws of the United States, by John Bouvier, a publication from 1856, now in the public domain in the United States.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
