Derived from the French word “demeurer”, which means to stay or remain somewhere although the legal definition refers to the damages paid in respect of a delay in a charterparty contract.
In Law of Demurrage, author Hugo Tieberg defined it as:
“(P)ayment provided by contract or by law for the use by the charterer of time beyond which is conceived to be normally necessary for loading or discharging of a ship of for the performance of certain functions relating thereto.”
Causes are not necessarily related to the charterer’s action and include ice demurrage, or repairs occasioned by collision.
In English law, demurrage is taken as a per diem (daily) rate and always as a fixed sum, liquidated damages; damages contemplated upon in advance, “just in case”, by the contracting parties.
Days beyond the specified date for the end of the charter, and during which demurrage accrues, are called demurrage days.
REFERENCES:
- Moor Line Ltd. v Distillers Co Ltd 1912 SC 514
- Nielsen v Wait 16 QBD 67 (1885)
- Tiberg, Hugo, The Law of Demurrage (London: Sweet and Maxwell, 1995), pages 1-3.