Terms of Charterparty

Terms of Charterparty

Charterparty (Contracts) are made up of terms. The terms, for the benefit of lawyers, are classified as being:

  1. Conditions
  2. Warranties
  3. Innominate Terms

The classification of the terms in this way gives an indication of what remedies are available to the parties in the event of breach.

Conditions are treated as the most important terms of a contract and failure to comply with a condition gives rise to a right to terminate the contract and claim damages.

Breach of a Warranty gives rise to a right to claim damages but, generally, no right to terminate the contract.

Breach of an Innominate Term may give rise to a right to terminate in certain circumstances and will give rise to a right to claim damages.

In addition, where necessary to give business efficacy to a contract, a court may imply additional terms into a contract. In the context of a Voyage Charterparty, if not dealt with expressly in the contract, the following terms may be implied:

On the part of the Shipowner

1- Shipowner to provide a seaworthy ship
2- Ship will proceed with reasonable despatch
3- Ship will proceed without unjustifiable deviation.

On the part of the Voyage Charterer

1- Cargo shipped does not consist of dangerous goods.


Damages are the measure by which compensation is provided to a party when there is a breach of contract. The purpose of damages is to put the party back into the position they would have been but for the breach of contract. Therefore, if a breach occurs but no loss is suffered then, generally, there will be no award of damages.