Charter Parties Flashcards
What is a charter party?
A document containing written terms of a charter agreement between shipowner and a charter. It defines the obligations, right and liabilities in clauses
What is a voyage charter?
A contract for the carriage of cargo between named places.
The shipowner is liable for crew and all running and voyage costs
What is a time charter?
A contract of hire for a named vessel for a specified period of time.
The shipowner is liable for all running expenses of the vessel and voyage costs
What is Bareboat charter?
The owner provides the ship only and is not liable for any further costs
What are the two common towage contracts?
TOWCON - Towage contract for a lump sum payment
TOWHIRE - Towage contract for day rate hire
What are the three main charter types?
Voyage charter
Time charter
Bareboat charter
When is a ship seaworthy in charter terms?
- Vessel is maintained and fit for sea. All surveys and inspections are completed and passed. (Technically seaworthy)
- Cargo spaces fit for reception and carriage of cargo. Cargo is properly loaded and stowed (Cargoworthy).
- Vessel is equipped and supplied for the duration of the voyage (Fittedness for voyage)
What is included in a deviation clause?
The ship can deviate to tow and/or assist vessels and to save life and/or property.
What are laydays?
The period in which the vessel must be presented for loading
What is laytime?
The period of time allowed to the charterers for cargo operations without additional payment to the owner.
What is an arrived ship in terms of a charter party?
The ship has reached the berth or an official waiting area for a berth
What is a notice of readiness?
The ship has arrived at the port or berth and is ready to load or discharge cargo
What is demurrage?
An amount payable when the ship is detained longer than the laytime.
What is despatch?
When the cargo operations are completed before the end of the laytime and a reward is paid to the charterer.
What is maritime lien?
When the carrier holds the cargo in lieu of owed payment.
What conditions could render the ship unseaworthy?
- Statutory certificates expired or invalid
- Holds or cargo equipment not fit for cargo
- Cargo is not properly stowed or secured
- Not enough crew or crew not qualified/certified
- Missing charts
- Not enough food/water/bunkers for the voyage
What is a bill of lading?
A bill of lading is
- A receipt of goods
- Evidence of and terms of a contract between the shipper and the carrier
- A document of title (Legal right to possession)
- It may be negotiable, in which case it is an accurate description of the goods to be sold.
When is a bill of lading dirty?
When it has been claused by marking on it any deficiencies or damage to the cargo.
Can the Master accept a letter of indemnity from the shipper to allow a clean bill of lading to be signed?
No. The Master should never accept this. They should call the P and I rep for advice.
What is a mates receipt?
It is an accurate description of the quantity and quality of the goods loaded on the ship. It is used by the Master to complete the Bill of Lading.
What should the Master check on the Bill of lading to ensure it is correct?
- That the goods have actually been shipped
- Date of shipping is correct
- Bill of lading is not marked with “freight paid” or “freight prepaid” if its not true
- Any clausing from the mates receipt is added
- Reference to the charter party is true
- The number of original bills is stated
Every original must be signed by the Master
What should the Master do if any goods are damaged or missing?
- Reject the cargo
- Accept the cargo in exchange for a claused Bill of Lading
- Contact the P and I club
When is a letter of protest issued?
When any disagreement arises and it should be stapled to the Bill of Lading
What should the Master never do regarding bills of lading?
- Sign blank Bills of Lading
- Amend or re issue Bills of lading
- pre date or post date
Contact the P and I club if any of these are demanded.
What are the two most common trade terms for cargo shipping?
- CIF
- FOB
What is CIF?
Cost, Insurance, Freight.
The seller pays all costs for the shipment to a named discharge port and provides all the shipment documentation.
Risk for the cargo passes from the seller to the buyer when the cargo is loaded onboard a ship
The seller retains title to the goods until the buyer has paid for them so if the buyer goes bankrupt, the seller can ask for the goods to be returned.
What is FOB?
Free on board.
The buyer arranges for and pays for the shipment and insurance. The seller packs the goods and delivers them to a named ship. Title passes from the seller to the buyer when the goods are loaded on board.
The goods are then free to be traded by the buyer whilst in transit.
