Time Charter Ship Description

Terms  of a time  charter  differ radically  from  those  of a voyage charter  because  of the difference  of function. In the time  charter  the shipowner is placing  his vessel for an agreed period  at the disposal  of the charterer  who is free to employ  it for his own purposes within the  permitted contractual limits.  As the  charterer  controls  the  commercial function of the vessel, he is normally responsible for the resultant expenses of such activities and also under- takes  to  indemnify the  shipowner against  liabilities  arising  from  the  master  obeying  his instructions. While there is a variety of standard forms of time charter, the following  clauses are usually found  to constitute the core of the contract. The efficiency of the chartered vessel is of vital importance to the time charterer since the entire success of the commercial enterprise may depend on it. The preamble to the charter therefore sets out in detail the specifications of the vessel, the most important of which are normally those relating to speed, loading capacity and fuel consumption. There are differing views as to the legal significance of such statements and the remedies available in the event of them proving inaccurate. Thus, while New York arbitrators generally regard specifications as to speed and fuel consumption as constituting continuing warranties that the vessel will maintain such capabilities throughout the charter, English courts treat them merely as warranties as to the state of the vessel at the time of delivery under the charter. In the event of breach of any of these warranties, it would appear that the appropriate measure of damages would be the difference in the market rate of hire between a vessel with the indicated specifications and the chartered vessel. In the case of a breach of the speed warranty, it has been suggested that an alternative remedy might be to treat the vessel as off-hire for the appropriate period.