Charter party contracts are used in the shipping industry to establish the terms and conditions of chartering a vessel. They set the basis for the relationship between the vessel owner (the shipowner) and the charterer. There are several types of charter party contracts, each with its specific terms and conditions, and which may affect the rights and obligations of the parties involved. In this article, we will explore the different types of charter party contracts.
Voyage Charter Party
The most common type of charter party contract is the voyage charter party. This type of contract is a one-off agreement between the shipowner and the charterer to transport cargo from one port to another within a specified period. In a voyage charter party, the shipowner agrees to carry the cargo for a fixed price, usually per ton of cargo. The charterer is responsible for loading and unloading the cargo, and the shipowner is responsible for providing the vessel and crew.
Time Charter Party
A time charter party is a contract that allows the charterer to hire a vessel for a specific period. The vessel remains under the control of the shipowner, who is responsible for its maintenance and operation. The charterer pays a fixed rate per day for the use of the vessel and the crew. Time charter parties are often used by companies that need regular or long-term shipping services.
Bareboat Charter Party
A bareboat charter party, also known as a demise charter, is a contract that allows the charterer to take possession of a vessel as if they were the owner. The charterer is responsible for the vessel`s operation and maintenance, including crewing, insurance, and other costs. The owner transfers the control of the vessel to the charterer for a specific period and agrees to return it in the same condition at the end of the contract.
Laytime Charter Party
A laytime charter party is a contract that establishes a specific time limit for loading or unloading cargo. It sets the amount of time that the vessel must wait for cargo to be loaded or unloaded before the charterer is charged a fee for demurrage. Demurrage is a penalty fee charged by the shipowner for delays in loading or unloading the cargo beyond the specified time limit.
In conclusion, charter party contracts are essential in the shipping industry to regulate the relationship between the shipowner and the charterer. They establish the terms and conditions of the chartering agreement, which affects the rights and obligations of the parties involved. The four most common types of charter party contracts are voyage charter party, time charter party, bareboat charter party, and laytime charter party. Knowing the different types of charter party contracts is crucial in making informed decisions when chartering a vessel.