Off Hire Clause
An off-hire clause is a term included in a charter party that defines when a vessel is considered temporarily out of service and therefore not earning hire (freight). This situation usually arises when the vessel cannot perform its agreed service due to reasons such as mechanical breakdown, lack of crew, equipment failure, or extended port delays. During this period, the charterer is typically not required to pay hire. The clause clearly protects the charterer from paying for non-productive time.
The clause outlines specific conditions that trigger off-hire, how the off-hire period is calculated, and when hire payments resume. It may also define exceptions, such as delays caused by the charterer’s own actions, where hire may still be payable. Precise wording is critical, as off-hire disputes often involve time calculations and operational responsibility. Clear clauses help avoid commercial disagreements.
In practice, the off-hire clause plays an important role in risk allocation between vessel owners and charterers. It encourages proper vessel maintenance and operational readiness while ensuring fairness when service is interrupted. When clearly defined and properly applied, it supports smoother charter relationships and predictable cost control.
Frequently Asked Questions about Off Hire Clause
Clear answers to the most common questions people have when learning about Off Hire Clause.
A vessel goes off hire when it cannot perform its agreed service due to issues like breakdowns, crew shortages, or equipment failure.
No. The contract continues, but hire payments are suspended for the affected period as defined in the clause.
No. Delays caused by the charterer, such as late instructions or cargo issues, are usually excluded from off-hire conditions.