Time Charter Parties

When a whole or most of a ship is let to one person, the contract used is in the form of a charter party. There are two basic types of charter party: a time charter, in which the ship is let for a period of time, and a voyage charter, in which the ship is let for a voyage. Shipowners and charterers need to be aware of common charter party clauses, wordings, and rider clauses, so as to act advantageously toward prospective ventures. The charter party records all the details of the agreement reached between the two contracted parties. If all terms are mutually agreed between the two parties, then the charter party is Signed by the authorized persons on behalf of the owner and charterer. The charter party contract includes the responsibilities, rights, and demands of the charterer and the shipowner. It includes all the terms expressly agreed on by the contracting parties as well as implied terms and rider clauses or special terms that may have not been included in the firm offer but are subsequently agreed on to cover certain eventualities (e.g., what happens in the event of war). Time and Bareboat Charter Parties
Under a time charter party, the shipowner agrees to place the ship at the charterer’s disposal for a period of time, during which the charterer may freely employ the ship for its own account. The shipowner is remunerated by way of hire, paid usually in advance at regular intervals, while still being required to operate the ship. The responsibility for arranging the ship’s employment, purchasing bunkers, and paying port charges, stevedores, and other expenses related to the voyage passes to the charterer. The responsibility for the operating expenses of the ship (crewing, insurance, repairs and maintenance, stores and lubricants, etc.) remains with the shipowner. The charterer becomes the disponent owner and, as such, is entitled to re- ceive any freight earned by the ship. The charterer is entitled to issue voyage instructions to the master of the ship, despite the fact that the master is employed by the shipowner. The trip charter is a variation of the time charter party. Under the terms of this arrangement, the ship is let out on a time charter form contract for a voyage, or trip, with the shipowners being remunerated by way of hire. Under a trip charter party, the shipowner is obliged to send the ship on the agreed voyage. The charter is terminated on completion of the voyage. This is unlike a period time charter, which ends when the agreed time has passed. In a bareboat charter, the charterer takes over possession of the ship from the shipowner. The charterer essentially becomes the disponent owner of the ship and, as such, operates the ship while paying for all operating and voyage expenses. The only costs still paid by the ship- owner are the capital costs of the ship.