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Advance Freight


Law and Sea.
Deduction from freight. General Principles.

…according to the law of England, as a rule, freight is earned by the carriage and arrival of the goods ready to be delivered to the merchant, though they lie in a damaged state when they arrive. If the shipowner fails to carry the goods for the merchant to the destined port, the freight is not earned. If he carry part, but not the whole, no freight is payable in respect of the part not carried, and freight is in respect of the part carried unless the charterparty make the carriage of the whole a condition precedent to the earning of any freight…

Freight, Deduction and Set off
Last updated: 21-Jun-2015

Per Willes CJ in Dakin v Oxley (1864) 15 CBNS 646 at p.667:

In both classes of cases, whether of loss of quantity or change in quality, the proper course seems to be the same, viz. to ascertain from the terms of the contract, construed by mercantile usage, if any, what was the thing for the carriage of which freight was to be paid, and by the aid of a jury to determine whether that thing, or any and how much of it, has substantially arrived.

If it has arrived, though damaged, the freight is payable by the ordinary terms of the charterparty; and the question of fortuitous damage must be settled with the underwriters, and that of culpable damage in a distinct proceedings for such damage against the ship captain or owners.

Aries Tanker Corporation v Total Transport Ltd (The Aries), [1977] 1 All ER 398, [1977] 1 WLR 185, [1977] 1 Lloyd’s Rep 334 per Lord Wilberforce:

That a claim in respect of cargo cannot be asserted by way of deduction from the freight, is a long established rule in English law. It dates at least from Sheels v Davies (1814) 4 Camp 119: it received authoritative approval in 1864 from an eminent court in Dakin v Oxley (1864) 15 CBNS 646 and again from the same court in Meyer v Dresser (1864) 16 CBNS 646 where the rule was called ‘settled law’. As a rule it has never been judicially doubted or questioned or criticised; it has received the approval of authoritative textbooks. …

… the two rules have been running in parallel for over a century without difficulty, and indeed in Mondel v Steel 8 M & W 858 at 871, [1835-42] All ER Rep 511 at 516 itself Parke B specifically referred to the existence of a separate rule as regards freight. In this House, that the rule of deduction, or abatement, is one confined to contracts for the sale of goods or for work and labour and does not extend to contracts generally, was recognised in Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1973] 3 All ER 195 at 215, [1974] AC 689 at 717, per Lord Diplock. There is no case of its having been extended to contracts of any kind of carriage. The rule against deduction in cases of carriage by sea is, in fact, as well settled as any common law rule can be.

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