Dead freight - Indian Laws - General

Dead freight The term dead freight , according to Black s Law Dictionary , meant money payable by a person who has chartered a ship and only partly loaded her, in respect of the loss of freight caused to the ship-owner by the deficiency of cargo . (See page 794 of 1951 edition). In Stroud s Judicial Dictionary , fourth edition, at page 689, the term dead freight is defined as denoting an agreed sum to be paid in respect of space not filled according to charter, or damages provided for by a charter, in the event of the freighter not loading a full cargo . In Butterworth s Words and Phrases Legally Defined, 1969 edition, at page 293, the word dead freight is dealt with as follows : If the charterer, without lawful excuse, ships a less quantity of goods than that required by the charter party, or if the goods shipped are not in accordance with the charter party, the measure of damages is the difference between the freight actually earned, including any profit earned by carrying the goods of third persons, and the freight that would have been earned if the charterer had fulfilled his obligation. Such damages are usually known as dead freight (35 Halsbury s Laws of England (3rd Edn.) 399, 400). It must be admitted that the term dead freight is an inaccurate expression of the thing signified by it. It is, as Lord Ellenborough said in Phillips v. Rodie [1812] 15 East 547, at page 554, not freight but an unliquidated compensation for the loss of freight recoverable in the absence and place of freight . In construing the charter party it must be assumed that the parties understood the meaning of the terms they employed and that, amongst others, the term dead freight meant (according to Lord Ellenborough s definition) an unliquidated compensation for the loss of freight . [McLean and Hope v. Fleming [1871] LR 2 SC Div 128 (HL), per Lord Chelmsford, at pages 131-133]. ... dead freight is not freight at all properly so called, but is in reality damages for breach of contract, for convenience nicknamed dead freight... CIT, GUJARAT III VERSUS PESTONJI BHICAJEE - 1976 (1) TMI 21 - GUJARAT HIGH COURT