War Risks (Time Charter)

What it does

A time-charter war risks clause governs the charterer's right to order the vessel into areas affected by war or warlike risks during the charter. It restrains the charterer from directing the ship into dangerous zones and preserves the owner's and master's right to refuse such orders, while defining how the parties respond when war risks affect the employment the charterer has directed.

Because the charterer controls employment but the owner retains the ship and crew, the clause sits alongside the trading limits and employment provisions. It addresses additional war-risk costs over the charter, such as extra insurance premiums and crew bonuses for entering listed areas, and how hire and time are treated when a war risk prevents or alters the ordered employment.

Commercial effect

The clause allocates war risk within the time charter, protecting the ship and crew while leaving the charterer free to employ the vessel safely. By restricting orders into dangerous areas and preserving the right to refuse, it keeps the owner from being compelled into war danger, and its cost provisions determine who pays the additional premiums and bonuses that war-risk areas attract.

Since war-risk zones overlap with the trading limits and may change as a situation develops, the clause is part of the framework defining where the charterer may send the ship and on what terms. The treatment of hire and the allocation of additional costs make it commercially significant in any charter whose trades may touch areas of conflict or heightened risk.

Owner's perspective

The owner wants strong protection so that it is never obliged to send the ship and crew into war or warlike danger, with the right to refuse such orders clearly preserved. It treats this as fundamental, on the same footing as the safe-port and trading-limits protections, and relies on the clause to keep the vessel out of unacceptable risk regardless of the charterer's commercial wishes.

The owner also wants the additional costs of trading in or near war-risk areas, premiums and crew bonuses, placed on the charterer, since it is the charterer's employment decision that exposes the ship. It negotiates the clause alongside the trading limits and employment provisions so that the response to war risk protects both people and property and the owner's financial position.

Charterer's perspective

The charterer wants enough freedom to employ the ship in trades that may approach higher-risk areas, with the owner's right to refuse confined to genuine and reasonably apprehended war danger rather than used to block viable employment. It is conscious that a refusal can disrupt its plans, so it wants the triggers tied to a real risk assessment.

The charterer also focuses on the additional costs, wanting war-risk premiums and bonuses to be reasonable and clearly defined, and on the treatment of hire when a war risk prevents the ordered employment. It negotiates the war risks clause together with the trading limits and employment provisions so that war risk is allocated in a way that matches the trades it expects to perform.

Negotiation points

• The restriction on ordering the vessel into war or warlike areas and the owner's right to refuse.
• The threshold of reasonably apprehended danger for exercising that right.
• Who bears additional war-risk premiums and crew bonuses for entering listed areas.
• The treatment of hire and time when a war risk prevents the ordered employment.

Common variations

• A clause barring orders into war-risk areas beyond a danger threshold.
• A time-charter war risks clause based on a recognised standard provision.
• A clause placing additional premiums and bonuses on the charterer.
• A war risks clause cross-referenced to the trading limits exclusions.