Laydays and the cancelling date in a charter party agreement for cargo ships employment
What is Laycan
Laydays refers to a period of specified days (e.g. “Jan 7/16”) during which owners must present the vessel for loading. Laydays should not be confused with laytime, which is the period allowed to the charterers for loading and/or discharging without payment additional to the freight.
The cancelling date is the final layday and the date beyond which, if the chartered vessel has not been presented for loading, the charterers may reject her and cancel the charter. Will usually be found in a Cancelling Clause, which provides that the charterers will not be entitled to cancel the charter before the stated cancelling date, even when it is obvious that the vessel cannot arrive at the loading port by this date.
Together, laydays/cancelling or, as it is often called, the “laycan” is the period within which the vessel must be presented at the agreed port or place. If the vessel arrives before the first day of the period, the charterers do not have to accept her until commencement of the agreed laydays. If she arrives after the final layday, the charterers are entitled to reject the vessel and cancel the charter.
The charterers cannot be made to declare whether they intend to cancel or not before the vessel arrives at the loading port. Even after the cancelling date has passed, owners can still not compel the charterers to declare whether or not they will load the vessel (and in practice the charterers will often stay silent, hoping to make a new contract with owners). To avoid delay to the vessel in awaiting the charterer’s decision on cancellation, some charter parties have an extension to the Cancelling Clause compelling the charterers to declare within a specified time whether or not they elect to cancel after being informed of the vessel’s late arrival.
In charter parties and related documents the laycan will usually be written as (for example) “10/20 May”, meaning 10 May is the first layday while 20 May is the cancelling date.
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Commonly used chartering terms and abbreviations
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