A charter party is a document of contract by which a shipowner
agrees to lease, and the charterer agrees to hire, a vessel or all the cargo
space, or a part of it, on terms and conditions forth in the charter party. If permitted to do so by the terms of charter party, they may enter into subcontracts with other shippers.
It Is the contract between the owner of a vessel and the charterer for the use of a vessel. The charterer takes over the vessel for either a certain amount of time(a time charter) or for a certain point-to-point voyage (a voyage charter).
Types of Charter Party
The main types of charter parties are Bareboat Charter Party (sometimes called a Demise Charter). Time Charter Party and Voyage
1. Bareboat Charter Party. For this type of charter, shipowner
leases his entire vessel and the charterer has the responsibility of
operating it as though it were his own vessel. As the implies, the
bare vessel is chartered. The shipowner has, for the period covered by
the charter party, lost control of his vessel. The charterer pays all
expenses: fuel, stores, provisions, harbour dues, pilotage, etc. and
employs and pays the crew. There may, however, be a clause in the
charter party that the master and the chief engineer must be approved by the shipowner. The charterer is responsible for the upkeep, preservation and safety of the vessel. Before delivery to the charterer the vessel is surveyed by representatives of both parties and the same is done on redelivery.
2. Time Charter Party: A time charter party is a contract whereby the lessor places a fully equipped and manned ship at the disposal of the lessee for a period of time for a consideration called hire. The lessor may be the ship owner or demise charterer and the time charterer will be the lessee. The hire is payable at specified intervals during the term of the charter. On the other hand, a “time charter for a trip” is a time charter for a particular voyage or voyages. In such a case, the lessor places the fully equipped and manned ship with the lessee till the completion of the voyage. In such charter, hire is paid at periodic
3. Voyage Charter Party: This is a charter party for the carriage of a full cargo, not for a period of time, but at a stipulated rate per ton, for
one voyage only, between named ports to be named on arrival in a given
area. It is a frequently used charter party of which there are many
varieties, and most commodities and trades have a particular type to suit
their purposes. Shippers of large quantities of bulk cargo such as
phosphate, coal, grain, etc., have charter parties with special titles such
as “Fosfo”, “Americanized Welch Coal Charter Party”, “Baltimore
Grain Charter Party”, etc.
In a voyage charter party the charterer assumes no responsibility
for the operation of the vessel but generally pays stevedoring expenses in and out. A statement to that effect will be included in the charter party.
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