Full pay clause

A full-pay clause, also called an anti-deduction or no-deduction clause, is a time-charter provision requiring the charterer to pay each hire installment in full, without setting off off-hire, alleged off-hire, or counterclaims, unless the owner agrees the deduction in writing. It reverses the charterer’s usual self-help right to deduct for periods of off-hire, leaving any dispute to be resolved after payment. Courts have enforced these clauses strictly: in cases on such wording the charterer could withhold only where the vessel was actually off-hire on the due date and the owner had agreed in writing. Owners use them because charterers often deduct hire on grounds that later prove unfounded.