Main Terms

It is common practice when advertising a cargo to include the type of charterparty on which an eventual fixture will be based – e.g. Gencon CP – and certainly this should be the case when initially offering or counter-offering. It is, however, unusual for a contract to be based upon a blank copy of the named charterparty form, it being normal practice to base negotiations either on a proforma contract prepared by Charterers including any special terms and conditions relevant to their business or, more commonly, for negotiations to be based upon terms agreed for a similar previous fixture, if possible upon a signed ‘worked’ copy of a previous fixture’s charterparty. If a ship is in particular demand or is very specialist in character, the owner may have his own form of contract that he will insist on. It is usually only when negotiations are underway and have successfully reached perhaps, the ‘main terms’ stage that the charterparty upon which the charterer wishes to base the fixtures is made available to the Shipowner and/or Owner’s Broker. This may be due to the relative geographic locations of the parties involved, or down to a natural reluctance to go to the trouble of exchanging documents when it is by no means certain that the negotiations will show signs of reaching a successful climax and so warrant an exchange. It also may be considered poor negotiating tactics to appear too keen to give or to receive a proforma governing charterparty at too early a stage in negotiations. Most Charterers, owners and brokers now keep copies of Standard Charterparties on computer together with the proformas customarily used in their trades. These can easily be transmitted by fax or E-mail and this has effected chartering negotiations by making the exchange of charterparties so much easier, the ‘fax-machine’ can be said to have brought about a fundamental change in chartering tactics by which a party purposely introduces the basic terms and conditions at an early stage in negotiations, thereby eliminating the ‘main terms’ stage altogether.