Common law duties of the shipowner and the charterer Last updated 30-Sep-2014

The duty of common carriers by the common law is perfectly well understood; it is a warranty safely and securely to carry; whether they be guilty of negligence or not is immaterial;…
Per Wilde C.J. in Richards v L.B. & S.C. Ry. Co.(1849) 7 C.B. at p.858
Breach of contract is in itself an actionable wrong, irrespective of damage; consequently the plaintiff can recover nominal damages for the mere breach, even if he has suffered no loss thereby.
Common Law Of England, W.B. Odgers. Vol.2, p. 750.

Common law duties implied in voyage charters.

The common law rule stated in Paradine v Jane (1647) Aleyn 26 insisted on holding the parties to their bargain, and accordingly, mutual obligations of a shipowner and a merchant, so called mutual covenants, were almost absolute – save few exceptions such as acts of God, King’s enemies and perils of the sea.

I think it well to state what I understand by the term "common carrier". The following definition, which I take from a well-known text-book Macnamara on Carriers by Land, 2nd ed., p. 11, seems to me to be accurate:
A common carrier is a person who undertakes for hire to transport from a place within the realm to a place within or without the realm the goods or money of all such persons as think fit to employ him. To render a person liable as a common carrier he must exercise the business of carrying as a public employment, and must undertake to carry goods for all persons indiscriminately, and hold himself out, either expressly or by course of conduct, as ready to engage in the transportation of goods for hire as a business, not merely as a casual occupation pro hac vice.
Per Avory J in Watkins v Cottrell (1915) 52 L. R. 91

The owner with the cargo on board shall proceed without undue delays and reach the place named in contract, and there deliver the goods to the receiver. The merchant shall provide for the goods, load them on board and pay freight. Unless there was a breach of condition precedent, each party was obliged to perform its part and had a remedy in action for damages.

When we talk about the shipowner, only total loss of the vessel or capture by the enemies excused him from fulfilling his contract. Cresswell J in Moss v Smith [1850] EngR 155; (1850) 9 CB 94 described application of common law exceptions at pp.105-106:

The ship-owner engages to carry the goods from the port of loading to the port of discharge: his contract would be absolute, but for the exception introduced into the bill of lading,-unless prevented by perils of the sea. Now, when is the ship-owner said to be prevented by perils of the sea from fulfilling the contract he has entered into? When the ship is, by peril of the sea, rendered incapable of performing the voyage? A ship is not rendered incapable of performing the voyage when she is merely damaged to an extent which renders some repairs necessary: if that were so, any the most considerable damage, such as the loss of her rudder, without which she could not proceed, would render her incapable of fulfilling the contract contained in the bill of lading. But, if a ship sustains so much sea-damage that she cannot be repaired, so as to be rendered competent to continue the adventure, then the owner is prevented by a peril of the sea from fulfilling his contract. If the ship is totally destroyed or sunk, the performance of the contract is obviously prevented by a peril of the sea.

Now, while excused from performance, the owner was not entitled to any payment for the services done before his vessel become a total loss, same as contractor who performed his contract in part but was not able to finish it without fault of his own. Blackburn J said in Appleby v Myers (1867) L. R. 2 C. P. 651:

The case is in principle like that of a shipowner who has been excused from the performance of his contract to carry goods to their destination, because his ship has been disabled by one of the excepted perils, but who is not therefore entitled to any payment on account of the part performance of the voyage, unless there is something to justify the conclusion that there has been a fresh contract to pay freight pro rata.

Thus if, in the course of the voyage, the ship in which the goods are being carried is lost or the ship be disabled from completing her voyage, but the goods are saved, the shipowner may still entitle himself to the whole freight, by forwarding the goods by some other means to the place of destination, otherwise no freight ever becomes due for the goods which were never delivered.
Read more on Freight related issues here.

Merchant’s obligations were equally absolute unless he qualified them in clear words, so in Storer v Gordon [1814] EngR 708 it was held the charterers could not be excused from their contractual obligation to provide return cargo because the outward cargo was seized by the Government at Naples and never delivered to them. Furthermore, merchant was obliged to pay full freight on delivery and acceptance of the goods, even if they arrived damaged or merchant incurred additional expenses due to the owner’s imperfect performance.

Moreover, if words ‘always mutually excepted’ were omitted, usual exceptions in charterparties such as ‘perils of the seas’ and ‘acts of God and King’s enemies’ were held to be intended to protect the shipowner only, as Lord Alvanley held in Touteng v Hubbard (1802) 3 P&B 291 at p.298:

I will first consider for what purpose and for whose benefit the words 'restrain of princes during the said voyage always excepted' were introduced. It appears to me that they were introduced for the benefit of the master, not of the merchant, and the true construction of the charter-party is this: the captain engages to go to St.Michael’s, restraints of princes excepted, and the merchant engages to employ him and furnish the ship with cargo...

In later case, Barrie v Peruvian Corpn. (1896) 2 Com. Cas.50, when storm destroyed the loading berth, it was held that the charterer was entitled to rely on protection of ‘perils of the seas’ exception. Correctness of this case, however, was later questioned.

There are several basic implied obligations imposed by law on the owner:

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