Until the laydays have expired there is no breach of the contract to load, but where the charterer refuses to accept the vessel or provide a cargo, the owner need not keep her in readiness for delivery during all the laydays.
What constitutes readiness, or under what circumstances a ship is an "arrived ship," depends upon the terms of the bargain. Thus if the charterer requires her to reach her berth a notice given when she is in the stream will be insufficient. If she is to report for loading cargo she must have her loading apparatus ready and her cargo space available. The notice must actually reach the charterer unless he prevents it by absenting himself or his representative from the place where it is to be given. Notice should not be given on Sunday or a holiday, unless the charter expressly permits it.
In accordance with the general principle of the law of contract, laydays do not run if delay in loading or discharge is caused by the master or owner.
It is the duty of the charterer to have his cargo ready and he is liable for demurrage on account of the delay in furnishing cargo.
The charter party usually excepts Sundays and holidays from the laydays allowed for loading, but, after the expiration of the loading period (i.e., the laydays and the Sundays and holidays occurring among them), demurrage begins to be payable to the ship, and she is entitled to demurrage for Sundays and holidays as well as for secular days. This is because the work of loading in port does not usually proceed on Sunday, but a ship at sea continues on her voyage every day, so that every day's delay in departure causes an equal delay in arrival.
Charters often provide for "despatch money," which is a premium or allowance to the charterer for speed in loading. This is computed on each running day saved; that is, it is to be credited to the charterer for every day, including Sundays and holidays, occurring after the day on which the master is placed in a position to clear the vessel, up to and including the last layday, i.e., the end of the loading period. Despatch is not allowed unless bargained for in the charter.
22. Breach of Charter.—
If the shipowner refuses to perform the charter, the charterer has a personal action for damages against him but no maritime lien against the ship. There is no such lien for breach of a purely executory contract, that is to say a contract no part of which has been performed. So, if the ship is ready but the charterer refuses to perform, the remedy is personal only and not against the goods. Each must endeavor to mitigate his loss, the ship by seeking other employment, the charterer by looking for another ship. But after performance of the contract has once commenced, there are reciprocal liens on ship and cargo for its performance. The charterers have a lien on the vessel for all damages caused by a breach of the charter, the carrying out of which has been begun. For example, if the voyage is delayed after its commencement through the negligence of the owner, or if the master, while agent of the owner, violates the terms of the charter party, a lien arises in favor of the charterer.
In regard to the various obligations of the agreement, breaches by either party will either dissolve their relations or give rise to actions for damages. If nonperformance goes to the whole root and consideration of the contract, the other party may treat it as abrogated and be relieved from further obligation on his part in addition to his own claim for damages; if the nonperformance is not so vital, but may be amply compensated by damages, he will not be so relieved but must resort to his action.
The arbitration clause contained in a time charter is not enforcible in the United States.