Legal Definitions - contract demurrage

Definition: Contract demurrage refers to the liquidated damages that a charterer owes to a shipowner for failing to load or unload cargo within the agreed time. It is a type of demurrage that is specified in the charterer's contract with the shipowner.

Examples:

• If a charterer agrees to load a ship within three days but takes four days to do so, they may be required to pay contract demurrage to the shipowner.
• Contract demurrage can also apply to unloading cargo from a ship at the destination port.

These examples illustrate how contract demurrage is a penalty that a charterer must pay if they do not fulfill their obligations under the contract with the shipowner. It is a way to compensate the shipowner for any losses or expenses incurred due to the delay in loading or unloading cargo.