English law or American law - effect on limitation

If you are using a ship management agreement subject to English law, it is acceptable to use a standard limitation of liability clause as set out in the various BIMCO Shipman contracts. However, if your BIMCO Shipman contract is subject to American law, you may not be able to limit your liability to that agreed in the contract unless that limitation clause has been specifically discussed, agreed between the owners and managers and signed off separately. US courts do not like limitation of liability clauses in an off the shelf contractual agreement. They would want to see such a clause specifically negotiated and agreed separately.

Also, under US law, the ship manager who excludes liability "solely" arising out of his negligence in the contract will find that it is contrary to well established American concepts of proportionate fault and contributory negligence. An attempt to exclude such liability could be viewed as a contractual means of excluding the managers from liability for negligence. Monetary limitations on damages are also viewed unfavourably by the US courts.

If you are using a BIMCO Shipman contract subject to other jurisdictions such as Italian or German, you will need to have your contract reviewed by a local lawyer because certain concepts of English law are not followed in those jurisdictions.

Therefore, with any ship management contract that limits your liability and is subject to a legal system other than English law, you would need to contact a local lawyer to assess whether such an agreement would be binding and/or whether there are ways and means of enforcing that limitation of liability by signing a separate agreement.

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