Purchase orders

Last year we sent a circular advising ship managers to review their purchase orders to make it absolutely clear to the company supplying goods or services to the ship that its contract for goods is directly between the supplier and the ship owner and not between the supplier and ship manager. In order to make this clear, the purchase order should clearly state (at the top of the page!) that the goods are being purchased by the owner care of (c/o) the ship manager and that any invoice should be made out to the owners c/o the ship manager. The purchase order should be signed off "XYZ Shipmangement Co Ltd as agents for and on behalf of the owners of the MV HAPPY CAMPER".

Whilst this does not provide the ship manager with 100% protection in the event the invoice is not paid by the owner it will make it much more difficult for any supplier to pursue you rather than the owner. In times where owners and charterers are going bankrupt on an almost daily basis, it is absolutely vital that the ship manager reviews his purchase order and ensures that his agency status is made clear in all communications with suppliers whether that be via a purchase order, a letter or by e-mail. In all correspondence the ship manager should make reference to his role as an agent and also on whose behalf he is acting and name that specific ship owner.

ITIC has seen many examples where bunkers have been ordered by the manager but the manager did not make it clear that he acted as an agent and/or on whose behalf he is acting. When the owner did not pay for the bunkers, the supplier successfully obtained payment directly from the manager as the courts decided the manager had ordered the goods, not the owner.