Contracts for Construction of Vessels

Contracts relating to the construction of vessels are not considered maritime contracts.  Claims for breach of such contracts are not within the admiralty jurisdiction.  However, if the negligence constitutes a maritime tort, tort claims for negligent construction or design of a vessel will lie in admiralty.[i]

There is a settled rule that contracts for building a ship, or contracts for selling a ship, are not maritime contracts within the jurisdiction of the admiralty courts.  For a contract to fall within the admiralty jurisdiction, it must concern transportation by sea, relate to navigation, or maritime employment, or be one of navigation and commerce within navigable water.[ii]

However, a contract for equipment and its installation related to the repair of a completed boat is maritime.  Contracts to construct entirely new ships are non-maritime, because they are not related enough to any rights and duties pertaining to commerce and navigation.[iii]

[i] Employers Ins. v. Suwannee River Spa Lines, 866 F.2d 752 (5th Cir. La. 1989)

[ii] Grand Banks Fishing Co. v. Styron, 114 F. Supp. 1 (D. Me. 1953)

[iii] Boat La Sambra v. Lewis, 321 F.2d 29 (9th Cir. Cal. 1963)


Inside Contracts for Construction of Vessels