Demurrage Law and Legal Definition

Demurrage is a term in maritime law referring to the damages payable by a ship charterer to the ship owner, as compensation for lost time; where a chartered ship is not returned to the owner on a specified date. Demurrage is a separate freight charge, in addition to the shipping costs, imposed for unreasonable delays in loading or unloading cargo or for sailing. The amount is determined according to the terms of the charter contract. The days specified by the ship to load or unload are called lay days. When a charterer exceeds that time, damages arise which are pre-specified or liquidated, and is known as demurrage. Payment of demurrage is excused only if the delay was unavoidable, such as a delay caused by a natural disaster or the fault of the carrier.