Courts of admiralty have jurisdiction over causes of action arising out of maritime contracts, either for direct enforcement or involving matters arising as the result of such contracts. When a contract relates to ships in their use as ships or to commerce or transportation in navigable waters, there is admiralty jurisdiction.
Ship construction is not generally regarded as a traditional maritime activity, since a ship under construction has not evolved into “vessel” status. Thus, contracts for the construction of vessels, or for labor performed or materials supplied for their construction, are not maritime contracts cognizable in admiralty, although contracts for supplies and repair are within admiralty jurisdiction. This rule applies whether the repairs are made to a vessel while in a floating dock or a dry dock, or while it is afloat.
Additionally, an agreement for transporting supplies to a well site in a vessel is a maritime contract to which maritime law applies. However, a contract for repairs on a vessel taken out of service, for supplies to a floating structure that is not a vessel, or for supplies to a ship that is not engaged in navigation at the time the supplies are furnished is not a maritime contract and is not within the jurisdiction of admiralty. Furthermore, contracts for minor repairs on board a vessel are also not necessarily considered within admiralty contract jurisdiction.
For a contract to work on a vessel to be maritime, the vessel must be “launched” and “completed” before the contract becomes a binding obligation. If the contract to work on a vessel is entered before the vessel is “launched” and “completed,” the mere fact that goods and services are not provided pursuant to the contract until later cannot retroactively bestow maritime status on the contract.
Several cases have differentiated between a contract to supply a single vessel and one to supply several vessels over a period of time, and have held that the latter is not maritime.
Such statutes as the Suits in Admiralty Act and the Public Vessels Act may also limit contractual claims of a maritime nature against or involving the United States as a party.