ADMIRALTY CONTRACT JURISDICTION
By Allen E. Graham

The existence of Admiralty jurisdiction in connection with a particular dispute, can have legal significance with respect to the applicable law; the forum where the dispute is litigated; the identity of the fact finder (judge or jury); and the existence of in rem claim. What agreements/contracts are so particularly maritime in nature that they are and should be governed by admiralty law?

Admiralty contract jurisdiction does not depend on locality ("upon navigable water"), but rather "...extends over all contracts which relate to the navigation, business or commerce of the sea." Admiralty jurisdiction also encompasses contracts to be performed upon the sea or upon waters within the ebb and flow of the tide. The true criterion as to whether or not admiralty contract jurisdiction exists is whether the contract is a "maritime contract," having reference to maritime service or maritime transactions.

To determine whether a contract is maritime, the courts look at the subject matter of the contract as well as prior judicial precedent. In Peoples Ferry Company v. Beers the Supreme Court of the United States held that a contract to construct a ship is not within admiralty jurisdiction because it is a contract made on land to be performed on land and is preliminary for the ship's navigation. However, contracts for repairs or extensive reconstruction of a vessel in navigation are within admiralty jurisdiction. Contracts for minor repairs on board a vessel (dishwasher repair) are not necessarily considered within admiralty contract jurisdiction.

An agreement for construction or drilling operations on a fixed platform on the outer continental shelf is not a maritime contract. However, an agreement to transport men and supplies to and from an offshore drill rig is within admiralty contract jurisdiction. A contract for the sale or lease of a shipping container used in maritime transport is a maritime contract, but an agreement to truck those containers from one terminal to another is not within admiralty jurisdiction. A surety agreement is not within admiralty contract jurisdiction since the obligation of the surety is only to pay damages in the event of liability on the underlying contract. However, a guarantee to fully perform a maritime contract does give rise to an admiralty claim.

Factors a court will consider in determining whether or not admiralty contract jurisdiction exists are as follows:

1. The provisions of the specific work order or contract.
2. The work actually performed in fulfillment of the contract.
3. Whether the work performed in connection with the contract was performed aboard a vessel upon navigable waters.
4. The extent to which the contract relates to the overall mission of a vessel or vessels.
5. The principle work and roles of the parties.

Despite the apparent confusion in conflicting case law on whether a contract is a maritime contract" for purposes of admiralty jurisdiction, such jurisdiction is well established in the following types of contracts:

· Contracts to furnish supplies or accessories to a particular vessel
· Charter parties and other arrangements for the hire of a vessel
· Wharfage agreements
· Vessel storage contracts
· Contracts for the carriage of goods and freight
· Stevedoring contracts
· Contracts for the carriage of passengers by water
· Maritime insurance contracts
· Pilotage contracts
· Seamen's employment contracts (personnel such as cooks and telephone
  operators not directly engaged in navigation)
· Salvage contracts
· Towage contracts
· Ship mortgages covered by the Ship Mortgage Act of 1920.

Certain types of contracts are "mixed" in character containing both maritime and nonmaritime elements. Where the non?maritime part of the contract is 1) merely incidental or 2) can be separated from the maritime portion of the contract, the court will exercise admiralty jurisdiction over the maritime portion of the contract. Where the maritime and nonmaritime claims are bound together and cannot be separated, the court will deny jurisdiction even as to the maritime portions of the contract.

Good luck and Safe Boating!