3 Shipbuilding Contracts and Termination Issues
Edited By: David J Attard, Malgosia Fitzmaurice, Ignacio Arroyo, Norman Martinez, Elda Belja
- Seafarers — Nationality of ships — Straits — Contract claims
This chapter examines the parties’ rights and obligations stated in a shipbuilding contract, and the issues regarding the termination of a contract. It explains the basic principles of English law pertaining to shipbuilding contracts, emphasizing the most commonly used form, the Shipbuilders Association of Japan (SAJ) form. Like any other contract, there must be a binding agreement—an offer and an unconditional acceptance, the intention to create a legal relationship, and consideration. There must also be certainty of terms, which define clearly the extent of the duties of each party. The chapter discusses issues involving contract termination by the buyer and by the builder. For each issue, it compares the provisions stated in the SAJ form to the newly proposed new Standard Newbuilding Contract (NEWBUILDCON), which was developed to provide builders and buyers with an alternative choice of contract.