charterparties

A charterparty, or charter party, is a contract between the owner of a vessel and a charterer that governs the use of the vessel for the transport of goods. It defines the vessel to be used, the terms of hire or freight, the voyage or period of use, and the responsibilities for crewing, maintenance, insurance, and voyage operations. It does not transfer ownership of the vessel.

There are three main forms of charterparty. A voyage charter engages the vessel for a single voyage or series of voyages, with the owner providing the vessel, crew, and bunkers. The charterer pays freight and directs loading and discharging ports; the owner remains responsible for seaworthiness and voyage costs not charged as freight. A time charter hires the vessel for a specified period, with the charterer controlling commercial use and routing while the owner provides crewing and technical management; hire is paid for the period, and off-hire periods may be deducted if the vessel is unable to perform. A bareboat or demise charter transfers possession of the vessel to the charterer for a period, with the charterer responsible for crewing, operation, and all voyage costs; the vessel is delivered without crew and re-delivered at term’s end.

Key terms commonly found in charterparties include laydays and laycan (the window for loading), laytime (time allowed for loading/unloading), demurrage (compensation for delays beyond laytime), despatch (bonus for early completion), NOR (notice of readiness), and off-hire provisions. Standard forms from bodies such as BIMCO (e.g., Gencon, Baltime, NYPE) are frequently used to streamline negotiation.

Governing law and dispute resolution are specified in the contract, often with arbitration as the chosen mechanism.