Sat, Oct

What are a Cesser Clause and a Cesser and Lien Clause?

MCA Oral Exam Questions

A Cesser Clause is a voyage charter party clause stating that "charterers' liability will cease on shipment of cargo and payment of freight, deadfreight and demurrage", i. e. sums incurred at the loading port. 

It is used where charterers are merely agents or brokers for the loading of a shipper's cargo and are not themselves the shippers. Charterers would be anxious in that case to ensure that their liability for the cargo ceased once it was loaded, but the shipowners, not wanting to find themselves without legal remedy for any breach of contract or damage done to the ship after this, want recourse against some other party (normally the receiver). Therefore, where a Cesser Clause is used, a Lien Clause will usually also be included, giving owners the right to retain possession of the goods at the discharge port until outstanding debts are paid. The two clauses are sometimes combined in a Cesser and Lien Clause. (The relief given to charterers from their obligations only operates to the extent that outstanding sums can be recovered at the discharge port. The owners must proceed against receivers first, but charterers will still be liable for sums which cannot be recovered from receivers. )