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Law and Sea.
Damages for detention and Demurrage

Unlike demurrage, which is agreed on signing the charterparty, damages for detention are influenced by the freight rate at the time of delay and may be considerably higher than demurrage rate on a rising market.

Last updated: 21-Jun-2015

Well-known passage from the judgment of Scrutton J in Embiricos v Reid (Sydney) & Co [1914] 3 KB 45 at p. 54:

Commercial men must not be asked to wait till the end of a long delay to find out from what in fact happens whether they are bound by a contract or not; they must be entitled to act on reasonable commercial probabilities at the time when they are called upon to make up their minds.

Per Devlin J in Universal Cargo Carriers Corpn v Citati [1957] 2 All ER 70 at p.80:

But a party to a contract may not purchase indefinite delay by paying damages … When the delay becomes so prolonged that the breach assumes a character so grave as to go to the root of the contract, the aggrieved party is entitled to rescind. What is the yardstick by which this length of delay is to be measured? Those considered in the arbitration can now be reduced to two: first, the conception of a reasonable time, and secondly, such delay as would frustrate the charterparty … in my opinion the second has been settled as the correct one by a long line of authorities.

Telford Homes (Creekside) Ltd v Ampurius Nu Homes Holdings Ltd [2013] EWCA Civ 577 per Lewison LJ at para 69:

I accept that uncertainty caused by delay is a commercial problem. But it seems to me that (absent any attempt to make time of the essence) delay, even with its attendant uncertainties, will only become a repudiatory breach if and when the delay is so prolonged as to frustrate the contract. In the context of an agreement to grant a series of 999 year leases, we are a long way from that in this case.

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