Demurrage is an allowance made to a ship-owner by the freighter, for the detention of the ship in port beyond the specified time of sailing. The demurrage is properly the delay itself, but the term is generally used to signify the compensation due for the delay. A certain number of days, called lay-days or lie-days, are allowed for receiving and discharging cargo, and it is usually stipulated in charter-parties that the freighter may detain the vessel, either for a specified time, or as long as he pleases, after the expiration of these days, on paying so much per diem for overtime. Whether the days for which demurrage is due are working days (i.e. with Sundays and holidays excepted) or running days will, in the absence of special agreement, depend upon the custom of the port. All the ordinary causes of detention, such as port-regulations, the crowded state of the harbour, and the like, are at the risk of the freighter, and demurrage must be paid, though it be proved that the delay was inevitable. But demurrage is not due where the delay arose from detention of the ship by a public enemy, or from hostile occupation of the port; and it cannot, of course, be claimed where the fault lay with the owners themselves, or the master or crew of the vessel. The demurrage ceases as soon as the vessel is cleared for sailing, though she should be prevented from actually doing so by adverse winds. When the days of demurrage are limited by special contract, and the ship is detained beyond them, the sum due as demurrage under the contract will be taken as the measure of the loss for the further time which may be claimed in the form of damages. It will be open, however, to both parties to show that the rate thus fixed per diem is either too high or too low. When the time allowed for loading and discharging expires, including the extra days if such be stipulated, the master will be entitled either to sail or to claim damage for detention.
The allowance of 1½d. per oz. claimed by the Bank of England for giving gold coin in exchange for bullion is also called demurrage.