Reporter :Juvy Barrameda RemodoProfessor: Eduardo R. Meneses Jr. Implied Warranties

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What is an Implied Warranty?

warranty

an engagement by the insured party that certain statements are true or that certain conditions shall be fulfilled, the breach of it invalidating the policy.express warranty:a warranty that is created in a contract by a statement of fact (as a description) which is made about the object of the contract and which forms a basis of the bargainSec. 113.

In every marine insurance upon a ship or freight, or freightage, or upon any thing which is the subject of marine insurance, a warranty is implied that the ship is seaworthy.

implied warranty:a warranty that is not expressly stated but that is recognized or imposed by the law based on the nature of the transaction

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Sec. 114. A ship is seaworthy when reasonably fit to perform the service and to encounter the ordinary perils of the voyage contemplated by the parties to the policy.Thus seaworthiness can be defined as meaning the fitness of a ship in allrespects to cope with conditions likely to encounter at sea; this includes not only her hull and equipment, but also her crew competency, sufficient stores and bunkers quantity.

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Sec. 116. A warranty of seaworthiness extends not only to the condition of the structure of the ship itself, but requires that it be properly laden, and provided with a competent master, a sufficient number of competent officers and seamen, and the requisite appurtenances and equipment, such as ballasts, cables and anchors, cordage and sails, food, water, fuel and lights, and other necessary or proper stores and implements for the voyage.

Sec. 115. An implied warranty of seaworthiness is complied with if the ship is seaworthy at the time of the of commencement of the risk. When does an implied warranty of seaworthiness is complied?

Exceptions:

When the insurance is made for a specified length of time, the implied warranty is not complied with unless the ship be seaworthy at the commencement of every voyage it undertakes during that time;

When the insurance is upon the cargo which, by the terms of the policy, description of the voyage, or established custom of the trade, is to be transshipped at an intermediate port, the implied warranty is not complied with unless each vessel upon which the cargo is shipped, or transshipped, be seaworthy at the commencement of each particular voyage.

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Time Policy A warranty of seaworthiness cannot be implied in a time policy, as the risk commences on a specific date, whatever the position or condition of the vessel.Ref: Marine Insurance Act 1906. Section 39(5)Voyage Policy Where the contract is to insure the subject matter 'at and from' or from one place to another or others, the policy is called a 'voyage policy'Where the contract is to insure the subject matter for a definite period of time the policy is called a 'time policyImplied warranty of seaworthiness is only applicable to voyage policies. WHY? The reason for this is that the assured under a voyage policy is usually in control and possession of a vessel before a vessel embarks on a voyage and is able to do something about and comply with any obligation as regards the seaworthiness of the vessel

Sec. 117. Where different portions of the voyage contemplated by a policy differ in respect to the things requisite to make the ship seaworthy therefor, a warranty of seaworthiness is complied with if, at the commencement of each portion, the ship is seaworthy with reference to that portion.DesignConstructionManningEquipmentMaintenanceSOLASMARPOLSTCWMLC

Sec. 118. When the ship becomes unseaworthy during the voyage to which an insurance relates, an unreasonable delay in repairing the defect exonerates (absolve) the insurer on ship or shipowner's interest from liability from any loss arising therefrom.

Sec. 119. A ship which is seaworthy for the purpose of an insurance upon the ship may, nevertheless, by reason of being unfitted to receive the cargo, be unseaworthy for the purpose of the insurance upon the cargo.

Where the nationality or neutrality of a ship or cargo is expressly warranted, it is implied that the ship will carry the requisite documents to show such nationality or neutrality and that it will not carry any documents which cast reasonable suspicion thereon.Sec. 120.

"The ability of ship-owners to insure themselves against the risks they take not only with their property, but with other peoples lives, is itself the greatest threat to the safe operation of ships. Samuel PlimsollThanks for listening.

Samuel Plimsoll(10 February 1824 3 June 1898) was an English politician and social reformer, now best remembered for having devised thePlimsoll line(a line on a ship's hull indicating the maximum safe draft, and therefore the minimumfreeboardfor the vessel in various operating conditions).