Monday, 20 January 2014

CONTRACT WORDING: 'including, without limitation...'

Ship owners benefit from a range of limitation conventions and contractual limitations and often their insurances (especially P&I Cover) will be prejudiced in the event that they optionally waive those rights to limitation, so careful attention to contract wording is essential.

A contract which seeks to have the ship owner waive his rights will normally include an express term to that effect, i.e. 'the owner hereby agrees to waive their right to limit under the LLMC Conventions, CLC Conventions or any other ...' or 'the Owner shall pay claims for damage to Charterers property arising under this contract in full and without limitation'.

This language is not to be confused with the phrase from american legalese which is now common in many commercial legal contracts worldwide - 'the Owner agrees to indemnify / settle ... including, without limitation, claims for x, y, z.'. Some have argued that this may be construed as an agreement to settle those specific listed claims without limitation, but this is not the case. This arrangement of words merely means 'included but not limited to'.

For example, if a ship owner agrees to pay the Charterers claims for losses resulting from the ship owner's crew's negligence including, without limitation, claims for pollution, property damage and third party injury, then those types of claims resulting from the ship owner's crew's negligence are definitely to be met by the shipowner, but this does not limit or prevent the Charterer from also claiming for other types of claims resulting from the ship owner's crew's negligence. Any application of limitation conventions is unaffected by the clause.

Another confusing phrase which is used in the same context is 'without limitation to the generality of the foregoing' or 'without prejudice to the generality of the foregoing', which merely means where you express a rule then give some examples, the examples cannot be said in any way to weaken or restrict the general rule which stands as if the examples had not been given.

2 comments:

Ava Cristi 14 July 2014 at 16:28  

Great Advice. When working with new client particularly out-of-town clients you have to protect yourself first and secure giving information to them.

Suhas Sanadi 19 January 2015 at 06:45  

I am very thankful, to very useful explanation ! set my mind free by clear meaning, the words were haunting me for its meaning and use.

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