Get It In Writing! Contracts in Maritime Law
I often get calls from prospective clients wishing to collect money owed to them for services rendered in connection with the marine industry. Sadly, I have to advise some of these clients that because they did not get their agreement in writing, the cost of filing suit or other means of obtaining relief outweigh the amount they are owed.
Palm Beach County has a thriving marine industry. Marine industry professionals in this county routinely do business on a handshake without a signed contract. While this is a perfectly acceptable business practice and despite what people say, it is a binding contract, written contracts that provide for attorney’s fees are an important safeguard that should be considered.
An attorney’s fee provision in a contract basically states that if this contract comes into dispute, the prevailing party will be awarded attorney’s fees. For example, when a boat captain isn’t paid for the work he has done, this type of contract can help rectify the issue. If the captain is owed $8,000, the cost of arresting the boat usually exceeds the amount owed. The captain can sue in county court for that amount, but it would cost him about a quarter of the amount he is owed. The simple solution to this problem is to have an agreement signed by both parties from the start. That way, if there is a dispute between the parties, the prevailing party will be awarded attorney’s fees. Also, written contracts are significantly easier to prove in court. If there is no writing, the attorneys must use the course of conduct of the parties and it essentially becomes a “he said/she said” trial argument.
When a maritime contract goes south, there exists a remedy called a maritime lien. A lien is essentially a secured right to a charge on property for the payment of a debt. More specifically, the maritime lien is a special property right in a vessel given to a creditor by law as security for a debt or claim arising from some service rendered to the ship. The lien may be executed by arresting the boat and essentially selling the ship at foreclosure. This method of collection is applicable only to maritime law.
Perfecting a maritime lien is extremely difficult and requires an experienced maritime practitioner in order to accomplish it properly. One must research the vessel to determine if there are previous liens as previous liens take precedent over newer ones. Also, if the vessel has a preferred ship mortgage, that lien takes precedent over all other liens.
Because the laws at sea are so different than those on land, it takes a dedicated and experienced maritime practitioner to assist the maritime industry with contract disputes. Some attorneys provide contract drafting consultations free of charge if your business requires that service, as well. If you find yourself in a situation that needs clarification or counsel, don’t hesitate to seek assistance from a maritime-specific attorney. More importantly, get your contracts in writing!