The Theory of Contract and the Doctrine of Deviation

OBRA ESCRITA EM INGLÊS

The doctrine of deviation in the carriage of goods by sea has often been treated as a particular and critical breach. The seriousness of the fault and the harshness of its consequences have been explained to compensate the balance power between the shipowner and the cargo owner due to the defenseless of the latter after his goods are shipped.

Deviating (or stranding from the agreed course) would not only increase the risk of the venture, but it would create a new endeavor, fulminating the original contract and “creating a new one without the knowledge and acquiescence of the cargo owner”. However, under the theory of the contract, one could not benefit from his own wrongs (and bringing the contract to an end could benefit the faulty party), and one cannot be bound by an agreement that he did not agree with.

Those matters were always analyzed in courts’ judgments in cases of deviation and subject to the scrutiny of academic articles: deviation was sometimes a body of authority sui generis and sometimes subject to the principles of the contract.

The purpose of this book is demonstrating that the doctrine of deviation and the contract law have evolved, and it is not certain anymore that the concept of an unreasonable deviation could be considered a body of authority sui generis. The precedents and the steps that a shipowner can take to void the consequences of a deviation can make the contract law absorb the doctrine of deviation.

The first two chapters of this book are about the theory of the contract and presents its essential terms and obligations and the contract of bailment that is going to spring after a deviation. The following chapter points to the terms of a contract that are relevant for categorizing and deciding the consequences of a deviation. The third chapter displays the definition of deviation, and the first cases, stressing the irrelevance of a proximate cause to the consequences of a breach of a term in a contract. The next two chapters analyze the requirements and the consequences of a deviation. The sixth chapter is about the Hague-Visby rules and their application to the doctrine of deviation, followed by a chapter discussing quasi-deviation cases and the conclusion.

MARCOS AURELIO DE ARRUDA

Graduated from Vitoria Law School. Mr. Arruda holds an LLM (Master of Laws) in "International Maritime Law" from World Maritime University at Malmo (Sweden); and a Master's degree in "Inter-American Defense and Security" from Interamerican Defense College at Washington/DC (USA); .Mr. Arruda also has an MBA in "Business Management" from the Federal University of Rio de Janeiro (Brazil) and an MBA in "Finance" from IBMEC at Brasilia (Brazil). Mr. Arruda is graduated from PLA National Defense University in Changping (China). Mr. Arruda is also a retired Brazilian Navy Captain, who was the Harbor Master of the State of Espirito Santo, where he had the opportunity to direct and manage the activities necessary to ensure the enforcement of laws, regulations, and policies governing navigable waters, constructions above water, Search and Rescue (SAR), and where he was responsible for the official inquiries related to the safety of navigation, prevention of pollution by ships and ship's casualties.

Marcos A. de Arruda’s book focuses the doctrine of deviation applied to maritime contracts. This book presents contract’s theory and maritime law cases that are powerful tools of knowledge that have been honed by the evolution of the doctrine of deviation. Whether you are a new or a senior lawyer, or a government official, this book will boost your thinking, upgrade your foundational legal knowledge, and enhance your confidence as you will be more capable in advising  your clients, your organizations or yourself.

This book is essential for the professional of International Maritime Law who intends to advise his clients in fixture of contracts and resolution of problems related to that contract and is useful for all those who do business with any English-speaking country or who has a contract based on “common law” or abide by the “Hague-Visby Rules”.

This book is also very important for public authorities who are often faced with a request to change the date of departure or arrival of a ship, change of route, stocking pattern of material on board, and do not realize that their decision may result in the termination of the contract and their liability for future damages.

Maritime transport is responsible for 95% of world trade and this trade is governed by a matrix of contracts (purchase and sale, cargo and ship insurance, charterparty, financing etc.) most of the time based on common law.

The “doctrine of deviation” is a doctrine applied to international contracts that involve parts of countries whose legal system is based on “common law”, or parts that have chossen that law system to rule the contract. The doctrine has been developed to leverage the cargo owner’s power before the owner of the ship after the cargo is loaded.

“Deviation” means “deviating from the route” or “deviating from the contract” and has always been treated as a serious breach of contract. “Deviating from the route or the contract” not only increases the risk of transportation, but also creates a new contract with the terms of which the cargo owner did not agree.

The consequences of “deviation from the route or contract” range from the loss of exclusion clauses (which protect the ship) to the termination of the contract itself.