CHARTER PARTY CONTRACT

In the context of a charter party contract, the charter can rent the entire ship or a portion of its cargo space for one or more voyages for a specific amount of time that must be legally stated in the contract. It is identical to a leasing contract in which the landowner rents out his or her place to a lessee in return for money. Similarly, the owner of the ship will lend his ship entirely or partially to a charterer to transfer cargo by charging the charterer fee till the ship reaches the destined location to deliver those items to the desired location. Generally, the ship owner will be in charge of the ship’s navigation and maintenance under this contract. The charterer must pick which destination the ship must visit based on the call he receives. It is also a maritime contract between a ship-owner and a "charterer" for the hire of either a ship for the carriage of passengers or cargo, or a yacht for pleasure purposes. Charter party contract include

 It is a document defining who as “Owners” and “Charterers”. 

 Defines the obligations, rights and liabilities of the ship-owner and charterer. 

 It is usually drawn up by the broker representing the charterers following negotiation and agreement of terms between both parties.

  It is sometimes based on a specified charter party already performed by another vessel at an earlier date, in order to save effort and time in negotiating many of the terms. 

 It usually comprises a set of standard clauses on a printed form. 

 It may have many amendments to the standard clauses, as agreed by the parties 

 It should be signed by a broker representing each party to the contract, unless their principals sign instead.

  Should ideally be balanced so that it does not favor one party to the disadvantage of the other

TYPES OF CHARTER PARTIES

 There are three main types of charter parties:- 

BAREBOAT CHARTER CONTRACT: - 

The charterer takes responsibility for the crewing and maintenance of the ship during the time of the charter. He assumes the legal responsibilities of the owner, and is known as a despondent owner. Which is less frequently used in ordinary commercial practice. In bareboat charter agreement, the charterer effectively operates as a ship owner for the duration of the contract. The ship owner leases his ship to the charterer for an agreed-upon duration of time without the ship’s captain and crew, stores, or insurance policy. The charterer has the choice to select his own captain and crew, and he has the responsibility of the ship management, making all navigation choices and directing the captain of the ship. It is usually used mostly for financial agreements for the ownership of ships. The ships are rented as bareboat charter contracts with the opportunity to purchase. The charterer must make full and correct payments to the ship owner. The ship owner hands over the ship to the charterer as soon as the payment is paid to him.

TIME CHARTER CONTRACT : -

 The vessel is hired for a specific amount of time. The ship-owner manages the vessel but the charterer gives orders for the employment of the vessel, and may sub-charter the vessel on a time charter or voyage charter basis. In a time charter contract, the charterer is in charge of the business operation of the ship, while the ship owner is in charge of sailing and other ship management. He is responsible for paying the captain and crew’s salary, whereas the charterer is responsible for providing coal and paying port taxes. In terms of vessel handling, the captain must follow the charterer’s instructions. This contract will specify a location where the ship must be redelivered to the owners at the expiration of the period, and the freight will be paid until that point.

VOYAGE CHARTER CONTRACT: - 

The charterer hires the vessel for a single voyage, but the ship-owner provides the master, crew, bunkering and supplies. A voyage charter contract is the most common affreightment agreement. The ships are rented to the charterer on a one-way voyage basis to destined ports with a certain cargo at an exact price of freight agreed upon. The ship owner is in charge of the ship’s operations. He shall be held accountable for the monitoring and shipment of cargo to its destination. In this sort of contract, the freight amount, methods of shipment, and schedule of payment must be stated.