Cesser Clause The charterer's liability shall cease as soon as the cargo is shipped and the advance of freight, deadfreight and demurrage in loading if any are paid, the owner having a lien on the cargo for freight, demurrage and average. The idea is that the ship and her owner, once the cargo is loaded, shall have to look to the lien on the cargo for the payment of amounts due under the charter, and that the personal liability of the charterer shall cease at that point. The clause is applicable when the underlying sales contract is C and F or CIF because the seller is the charterer. This makes sense. A charterer who is also the cargo seller has no further control over the transaction once the goods are onboard (title and risk of loss has passed to buyer), and it is commercially reasonable that the charterer should desire to be removed from the transaction. However, the clause is irrelevant when the underlying sales contract is FOB because the buyer of the goods is also the charterer under an FOB sales transaction and in all cases will be responsible for both loading and discharge port demurrage. What ceases? This clause will relieve the charterer/seller of goods from discharge port demurrage or other liabilities for which a lien on the goods arise (such as general average contributions). As stated by the U.S. Supreme Court in Crossman v. Burrill, 179 U.S. 100 (1900) the clause "is to be construed ... as inapplicable to a liability with which the lien is not commensurate". This means that the charterer is still the charterer of the vessel and will still be responsible for many things. Thus, the Cesser Clause will not relieve the charterer from being liable to the vessel, by way of example, if the cargo was dangerous in nature and damaged the vessel, or if the stowage performed by the charterer or its agents at the loadport damaged the cargo, That is what happened in the famous case involving the Katingo Hadjipatera 1949 AMC 49. The charterers performed the stowage at the loadport. Bills of lading were issued by the vessel and were eventually held by third party consignees. Cargo damage was caused by bad stowage at the loadport. The vessel was held liable to the third party consignees for the cargo damage. However, the vessel and her owner were able to seek indemnity from the voyage charterer who did not enjoy protection under the Cesser Clause. That kind of liability did not cease. So when thinking about the Cesser Clause -you will remember that it mostly protects the charterer against being held responsible for discharge port demurrage. JW/96