Nautical Term: MOLOO
Definition of MOLOO
The Maritime Term ‘Molloo’ represents ‘More or Less Owners Option.’ This term is used in maritime contracts to describe an arrangement where the ownership of a vessel may be transferred between parties, either temporarily or permanently, as per the agreed terms of the Molloo contract.
For instance, suppose two shipping companies, A and B, engage in a Molloo contract. As per the agreement, Company A transfers the ownership of one of its vessels to Company B. However, the transfer of ownership is not permanent, as Company A retains the option to buy back the vessel from Company B at any time during the contract term. Once the contract term expires, the ownership of the vessel reverts back to Company A.
This Molloo contract enables both companies to reap the benefits of vessel ownership while minimizing their financial risks and exposure. It also provides the flexibility for both parties to modify the terms of the agreement as per their changing needs and requirements.
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