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“Subject to suppliers’ approval of the vessel” - a pre condition?

"Subject to details", “subject to board approval” and other similar expressions are well known in ship chartering, meaning that the C/P is not binding until certain terms are agreed to. But what about the expression “subject to suppliers’ approval of the vessel”? A dispute arose over its meaning in The Leonidas [2020].

Owners said it was a performance condition and C/P was binding, and that the phrase's customary meaning was that charterers had to take reasonable steps to obtain load port terminal's approval failing which they had to pay damages to owners.


As per the court this phrase related to matters affecting the commercial desirability for the charterer and possibly encompasses all those approvals which the charterer commercially wishes to obtain on the supply side. There were commercial reasons for it to not be treated as a performance condition but a pre-condition else it would constrain charterers' choice of supplier. C/P had not been concluded and any loss was owners’ to bear.


As a side note - a "subject" is more likely to be classified as a pre-condition when the subject's satisfaction depends on the decision of either owner or charterer. When a 3rd party is involved then courts have treated “subjects” differently. Also, US and UK have diverging views.




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