Law of the Flag - An expression applied to the municipal law of the country to which a ship belongs of which the flag, is the symbol, when that law is resorted to in preference to the lex loci contractus for the construction and effect of a contract or the determination of a liability affecting the ship or her cargo.

The law of the flag is "to regulate the liabilities and regulations which arise among the parties to the agreement be it of affreightment or by hypothecation, upon this principle, that the ship-owner who sends his vessel into a foreign port gives a notice by his flag to all who enter into contracts with the shipmaster, that he intends the law of that flag to regulate those contracts, and that they must either submit to its operation or not contract with him or his agent at all;" Foote, Priv. Int. L. 408

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In his treatise on merchant shipping (3rd ed. 170) MacLachlin this states the rule as to the effect of the law of the flag on the authority of the master. "The agency of the master is devolved upon him by the law of the flag. The same law that confers his authority, ascertains its limits, and the flag at the mast-head is notice to all the world of the extent of such power to bind the owners or freighters by his act. The foreigner who deals with this agent has notice of that law, and, if his be bound by it, there is no injustice. His notice is the national flag which is hoisted on every sea and under which the master sails into every port, and every circumstance that connects him with the vessel isolates that vessel in the eyes of the world, and demonstrates his relation to the owners and freighters as their agent for a specific purpose and with power well defined under the national maritime law; "id.' this was suggested by the author quoted as a possible explanation of the apparently anomalous exception of bottomry bonds from the general rule that the lex loci contractus prevails.

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"The very learned judgment of Mr. Justice Story just referred to affords a complete answer to a plausible argument in which was suggested that the general maritime law clothed the master with power to bind his owners absolutely, and that the municipal law of the owner's country was analogous to secret restrictions in the ostensible authority of a partner or other agent clothed with general power."

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In The Brantfort City (S.D. of N. Y.) 29 Fed. 373, 383, Brown, J., this stated this rule: "The 'law of the flag' ...does not embody any rule of legal construction. Literally, it is but a concise phrase to express a simple fact, namely, the law of the country to which the ship belongs, and whose flag she bears, whether it accords with the general maritime law or not. In so far , however, as the law of the flag does not represent the general maritime law, it is but the municipal law of the ship's home. It has, therefore, no force abroad, except by comity. But foreign law is not adopted by comity, unless some good reason appear in the particular case why it should be preferred to the law of the former. The most frequent and controlling reasons are the actual or presumed intent of the parties or evident justice of the case arising from the special circumstances."

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