Sellers' Defaults And Buyers' Remedies In The Ship Sale And Purchase

With respect to the contract of sale and purchase of ships, amongst many others, the prevalent form used in the ship sale and purchase market is "Norwegian Sale Form 1993" (NSF'93), based on which this dissertation studies the legal issues of the buyers' remedies when the sellers breach the ship sale and purchase contract under English law with reference to English cases.The sellers' obligations include to transfer the title of and deliver the ship to the buyers (which is an essential obligation of the sellers), warrant that the ship's quality satisfies the sale and purchase contract, and warrant that the ship is free from any debt, as well as other contractual obligations. Transferring the ownership means delivering various documents and transferring the title of the ship to the buyers. Delivery of the ship means transferring the possession of the ship to the buyers. More disputes have been incurred in practice during the latter process than those in the former. This dissertation therefore mainly studies these disputes in the latter practice which are divided into four categories of breach of contract, ie delayed delivery, refusing to deliver, unable to deliver and incomplete delivery, and its formation and buyers' remedies for each of them.The sellers shall warrant the quality of the ship provided to the buyers. That is to say that the sellers warrant that the ship they delivered to the buyers is satisfied with the buyers (the ship shall be delivered and taken over as she was at the time of buyers' inspection, fair wear and tear excepted) and satisfied with the classification society (the ship shall be delivered with her class maintained without condition/ recommendations). The sellers' breach of quality warranty is not considered to touch the essence of the contract. Therefore the buyers are not entitled to cancel the contract, as the buyers have to take over the ship although they may be able to claim for losses and damages againstthe sellers. In this scenario, the buyers may have to consider attaching the assets for enforcement of their rights. It is a general practice for the buyers to apply for an injunction in attaching the sellers' assets under English law. This dissertation analyzes some of the authorities and summarizes the major principles for applying injunction in such a situation.The sellers shall warrant that the ship at the time of delivery is free from all charters, encumbrances, mortgages, maritime liens or any other debts whatsoever. It is wise for the buyers to conduct an aforehand investigation and acquire security than to seek legal remedies after taking over the ship.Ship inspection, which mainly comprises superficial inspection and drydocking inspection, exists during the whole process of the ship sale and purchase. Superficial inspections can be divided into two categories: superficial inspection before and after the conclusion of the contract, which have much difference with each other. Drydocking inspection is for the purpose in allowing the buyers to have a chance to inspect the actual conditions of the ship's bottom and other underwater parts below the deepest load line, and open some machinery if necessary. If some defects so as to affect the ship's class are found, the buyers are entitled only to demand the sellers to make such defects good to the satisfaction of the classification society rather than cancel the contract. The buyers are entitled to cancel the contract only after the expiration of the cancelling date because of the ship's mending.