1. Averages – Art. 806 of the Code of Commerce considered averages as:
(a) all extraordinary or accidental expenses which may be incurred during the voyage in order to preserve the
vessel, the cargo, or both;
(b) any damages or deteriorations which the vessel may suffer from the time it ppputs to sea from the port of
departure until it casts anchor in the port of destination, and those suffered by the merchandise from the time
they loaded in the port of shipment until they are unloaded in the port of their consignment.
Petty or ordinary expenses incident to navigation shall be considered ordinary expenses to be defrayed by the
shipowner, unless there is an express agreement to the contrary.
2. Kinds of averages
a. simple average - include all the expenses and damages caused to the vessel or to her cargo which
have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo.
Since simple or particular averages do not inure to the common benefit, the owner of of the goods that suffered
the damage bears the loss.
e.g. losses suffered by the cargo either on account of inherent defect of the goods or by reason of an accident
of the sea or force majeure.
b. general average - include all damages and expenses which are deliberately caused in order to save
the vessel, its cargo or both at the same time, from real and known risk.
The Supreme Court adopted the following requisites of general averages:
(a) there must be a common danger
(b) that for the common safety, part of of the vessel or of the cargo or both is sacrificed deliberately
(c) that from the expenses or damages caused follows the successful saving of the vessel and cargo
(d) that the expenses or damages should have been incurred or inflicted after taking proper legal steps and
3. Jettison - The act of throwing overboard from a vessel part of the cargo, in case of extreme danger, to
lighten the ship. The same name is also given to the thing or things so cast out. A carrier by water may, when
in case of extreme peril it is necessary for the safety of the ship or cargo, throw overboard, or otherwise
sacrifice, any or all of the cargo or appurtenances of the ship. Throwing property overboard for such purpose is
called "jettison," and the loss incurred thereby is called a "general average loss."
4. Jason clause - Protective clause inserted into a Charter-Party or Bill of Lading which provides that the
shipowner is entitled to recover in general average even when the loss is caused by negligent navigation. The
need for such a clause arises from the decision of an American court that, while American law exempted a
shipowner from liability for loss or damage to cargo resulting from negligent navigation, this did not entitle the
shipowner to recover in general average for such a loss.
5. Towage - The act or service of towing ships and vessels, usually by means of a small steamer called a "tug."
That which is given for towing ships in rivers. Towage is the drawing a ship or barge along the water by another
ship or boat, fastened to her, or by men or horses, etc., on land. It is also money which is given by bargemen to
the owner of ground next a river, where they tow a barge or other vessel. one vessel is hired to bring another
vessel to another place.
6. Arrival under stress - under Art. 819, is the arrival of the vessel at the nearest and most convenient port
which was decided upon after determining that there is a well-founded fear of seizure, privateers, or pirates or
reason of any accident of the sea disabling it to navigate.
7. Collision - as applied to Maritime Commerce, is an impact or sudden contact of a vessel with another
whether both are in motion or one stationary.
8. Forms of collision –
Zones of collision:
(a) all the time up to the moment when the risk of collision may be said to have begun. Within this zone, no rule
is applicable because none is necessary
(b) the time between the moment when risk of collision begins and the moment when it has become a practical
certainty. The burden is on the vessel required to keep away and avoid the danger
(c) the time between the moment of actual contact. The rule is that the vessel which has forced the privileged
vessel into danger is responsible even if the privileged vessel has committed an error within that zone
9. Last clear chance
10. shipwreck - the demolition or shattering of the vessel caused by her driving ashore or on rocks and shoals
in the midseas, or by the violence of winds and waves in tempest.
11. barratry - An act committed by the master or mariners of a vessel, for some unlawful or fraudulent purpose,
contrary to their duty to the owners, whereby the latter sustain injury. It may include negligence, if so gross as
to evidence fraud.
12. mutiny 13. charter party - a contract by which an entire ship, or some principal part thereof is let by the owner to
another person for a speciﬁed time or use.
14. categories of chartered party –
(1) The Bareboat or Demise Charter - In a bareboat or demise charter, the shipowner leases to the charterer
the whole vessel. The charterer becomes the owner “pro hac vice” of the vessel since he mans the vessel with
his own set of master and crew, effectively becoming the owner for the voyage or service stipulated, subject
however to any liability for damages arising from negligence. Moreover, the bareboat charterer assumes the
customary rights and liabilities of the shipowner in relation to third persons who may have dealt with him or with
the vessel.; and
(2) Contract of Affreightment - The contract of Affreightment is subdivided into:
(1) Time Charter, and
(2) Voyage Charter
Time Charter – the vessel is leased to the charterer for a fixed period of time.
Voyage Charter – the vessel is leased for a single or particular voyage.
In the contract of affreightment, the charterer hires the vessel only, either for a determinate period of a time or
for a single or consecutive voyage, with the shipowner providing for the provisions of the ship, the wages of the
master and crew, and the expenses and maintenance of the vessel.
15. loans of bottomry - is a contract whereby the owner of a ship borrows for the use, equipment or repair of
the vessel, for a definite term, and pledges the ship as security, with the stipulation that if the ship is lost during
the voyage or during the limited time on account of perils enumerated, the lender shall lose his money.
Where the goods, or some part thereof, are hypothecated as security for a loan, the payment of which is
dependent upon maritime risks, what ensues is a loan on respondentia.
16. respondentia - it is the borrower's personal responsibility which is deemed to be the principal security for
the performance of the contract.
17. Sea worthiness – Generally, seaworthiness is that strength, durability and engineering skill made a part of
a ship's construction and continued maintenance, together with a competent and sufficient crew, which would
withstand the vicissitudes and dangers of the elements which might reasonably be expected or encountered
during her voyage without loss or damage to her particular cargo.
18. air worthiness – means that an aircraft, its engines, propellers, and other components and accessories, are
of proper design and construction, and are safe for air navigation purposes, such design and construction
being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft
19. Airway bill – a receipt issued by an international airline for goods and an evidence of the contract of
carriage, but it is not a document of title to the goods. Hence, the air waybill is non-negotiable. The air waybill
is the most important document issued by a carrier either directly or through its authorized agent. It is a nonnegotiable transport document. It covers transport of cargo from airport to airport.
20. Passenger ticket - The passenger ticket refers to ticket issued by a carrier. The passenger ticket must show
the following :
1. the place and date of issue;
2. place of departure and destination;
3. the agreed stopping places;
4.the name and address of the carrier;
5.the statement that the carriage is subject to the liabilities mentioned therein.
The absence or loss of passenger ticket does not affect the validity of the contract of carriage, but if the carrier
accepts a passenger without a ticket, s/he cannot enjoy the benefit of limiting his/her liability.