Demise Clause

A demise clause is a bill of lading provision that identifies the contracting carrier as the registered owner or demise charterer of the vessel, not the line whose form and house flag appear on the bill. Its purpose is to channel cargo liability to the shipowner, who can limit liability and is the res against which the cargo claimant arrests. In The Berkshire [1974] 1 Lloyd’s Rep 185 the court upheld a demise clause, holding the contract was made with the owner. The clause works with an identity-of-carrier clause; where both are present and consistent, the owner, not the time charterer or NVOCC line, is the carrier sued under the bill.