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'Lessons Learned' Strategies & Ideas for the Marine Industry

Remaining Responsible – General Disclaimers Don’t Work

A 2007 US District Court decision reminds contracting parties to keep focused on their responsibilities.  For many participants in the marine industry, it can be a firm reminder that broad disclaimers cannot be used to transfer responsibility. Ship owners and their design consultancies often attempt to have the shipyard be responsible for many aspects of the the ship’s design. This is despite the fact that the owner’s team has put together a lot of design information pre‐contract.

A US ship repairer took on a conversion contract for a vessel owned and operated by a federal agency.  The shipyard filed suit against the agency after completion alleging that extra costs were incurred because the government‐provided drawings were inaccurate and not coordinated with one another.  Regarding these drawing issues, the court focused on part of the contract.

The court’s decision first cited this wording from part of the ship conversion contract:

The Government does not guarantee the correctness of the dimensions, sizes, and shapes given in any sketches, drawings, plans or specifications prepared or furnished by the Government. The Contractor shall be responsible for the correctness of the shapes, sizes and dimensions of the parts to be furnished hereunder, other than those furnished by the Government.

The court then stated:

The Court finds that this provision does not affect the disposition of the case because it is a general disclaimer and does not relieve the Government of its obligation to provide adequate drawings and specifications.

This is not a new interpretation by the Court; it is a reminder of a well‐established principle. Simply stated, when an owner puts into writing information that will be used by shipyards for bidding purposes, that information has to be consistent will all other contract requirements. The correctness and reliability of that information cannot be disavowed by a broadly‐worded disclaimer.