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Breach of Contract – Warranty – Safe-berth Clause

By: Derek Hawkins//May 11, 2020//

Breach of Contract – Warranty – Safe-berth Clause

By: Derek Hawkins//May 11, 2020//

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United States Supreme Court

Case Name: Citogo Asphalt Refining Company, et al. v. Frescati Shipping

Case No.: 18-565

Focus: Breach of Contract – Warranty – Safe-berth Clause

In 2004, the M/T Athos I, a 748-foot oil tanker, allided with a nine-ton anchor abandoned on the bed of the Delaware River. The anchor punctured the tanker’s hull, causing 264,000 gallons of heavy crude oil to spill into the river. As required by federal statute, respondents Frescati Shipping Company—the Athos I’s owner—and the United States covered the costs of cleanup. They then sought to reclaim those costs from petitioners CITGO Asphalt Refining Company and others (collectively CARCO), which had chartered the Athos I for the voyage that occasioned the oil spill. According to Frescati and the United States, CARCO had breached a contractual “safe-berth clause” obligating CARCO to select a “safe” berth that would allow the Athos I to come and go “always safely afloat.” The question before us is whether the safe-berth clause is a warranty of safety, imposing liability for an unsafe berth regardless of CARCO’s diligence in selecting the berth. We hold that it is.

Affirmed

Dissenting: THOMAS, J., filed a dissenting opinion, in which ALITO, J., joined.

Concurring:

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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