Saleform 2012 is one of the most widely used contract formulars for the sale and purchase of second hand tonnage. The Saleform has its origins back to 1925 and was adopted by BIMCO in 1956. Since then, the Saleform has been amended several times, latest in 2012.
The 2012-revision included a new Clause 18, which states:
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel and supersede all previous agreements whether oral or written between the Parties in relation thereto.
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and shall have no right or remedy in respect of any statement, representation, assurance or warranty (whether or not made negligently) other than as is expressly set out in this Agreement.
Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.
Similar wording is included in other widely used standard contracts, for example Bimco’s new Shipsale 22.
The clause’s third paragraph states, inter alia, that the seller has excluded any liability for misrepresentation to the extent it shall not be considered as fraud. The same clause, however, also states that liability may only be excluded to the extent that such exclusion can legally be made. This would of course be the case whether expressly stated or not.
Under Norwegian Contract Law, it is generally agreed that it is possible to legally exclude liability for negligence, but not for grossly negligent or willful breach of contract. With regard to gross negligence, the courts and key authors have distinguished between a party’s own gross negligence and that of its employees.
The Norwegian Supreme Court has previously accepted a contract clause in a freight forwarding contract excluding liability for the gross negligence of employees, cf. Rt-1994-626. However, the Supreme Court has never given its opinion on to what extent it is possible to legally disclaim liability for the gross negligence of the contract party itself or its management.
The issue has been discussed in Norwegian legal theory, but without any clear consensus. The most common opinion is that a party can exclude liability for negligent misrepresentation, but not for its own gross negligence. However, some scholars have expressed the opinion that a party may also exclude liability for its own gross negligence, if such disclaimer is part of an “agreed document“, negotiated by representatives from the industry, such as the Saleform 2012, or for other reasons seems well justified.
In the case at hand, one of the issues in dispute was whether Saleform 2012 clause 18 third paragraph exempted the seller for liability for negligent or gross negligent misrepresentation under Norwegian Contract Law. Another related question was to what extent clause 18 excluded the implied terms of the Norwegian Sale of Goods Act § 19, according to which the seller can be held liable for misrepresentation even if the vessel is sold on an “as is” basis.
The District Court found that Saleform clause 18 third paragraph excluded the relevant provisions of the SoGA. As for the question of exemption of liability, the District Court expressed the opinion that the seller may legally exclude liability for negligent misrepresentation, but not for gross negligence. The court did not, however, find the alleged misrepresentation to be grossly negligent, and therefore ruled in favor of the seller.
The Court of Appeal also decided in favor of the seller, but based on the facts and without weighing in on the above questions. Furthermore, in April 2024, the Supreme Court declined to hear the case.
As a final point, it should be noted that both the District Court and the Court of Appeal found that the exclusion in Clause 18, third paragraph, does not apply to representations and statements expressly set out in the agreement, i.e. set out in Saleform 2012 or any rider clauses included. If the ship deviates from such representations and statements, this constitutes a breach of clause 11, which states that the ship shall be delivered as she was at the time of inspection “subject to the terms of conditions of this Agreement”.
The seller was represented by Bjarte Grønlien, partner and lawyer admitted to the Supreme Court, and Senior Associate Håkon Høysæter Lyngbø.
The judgements of the District Court and the Court of Appeal can be found on Lovdata.no, published as THOD-2021-154455 and LG-2023-47746 respectively.