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CHAPTER 3 Laytime and demurrage in CIF and FOB contracts

International Trade and Carriage of Goods


Page 35

CHAPTER 3

Laytime and demurrage in CIF and FOB contracts

Laytime and demurrage in CIF and FOB contracts

Professor Simon Baughen
1

Laytime and demurrage provisions are not the exclusive province of voyage charters. They also frequently appear in contracts of sale. The CIF seller or FOB buyer who charters a vessel to fulfil its obligations under the sale contract will want to find a way to ensure that any demurrage incurred under the charter can be passed on to its counterparty under the contract of sale. This may be achieved in three ways. First, the sale contract may have its own self-contained laytime and demurrage code with no reference to any charterparty. Second, the sale contract may have its own laytime provisions but incorporate the demurrage provisions of a charterparty. Third, the sale contract may incorporate both the laytime and demurrage provisions of a charterparty.

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