Lecture 5: Types of Charter: TC, Bareboat, Charter chain, Flashcards
What is a key characteristic of a bareboat charter?
a) The shipowner provides crew and insurance
b) The charterer assumes full operational control
c) The charterer pays only for fuel and port charges
d) The shipowner is responsible for all vessel expenses
b)
Under a time charter, who is responsible for crew wages and maintenance?
a) Charterer
b) Shipowner
c) Both shipowner and charterer
d) Port authority
b)
What is a risk associated with charter chains?
a) Shipowners losing ownership of the vessel
b) Charterers having too much control over vessel performance
c) Payment risks due to defaults in sub-charter agreements
d) Reduced maintenance costs for the shipowner
c)
What is the significance of the “Arrived Ship” clause?
a) It determines when laytime calculations begin
b) It allows the shipowner to cancel the charter
c) It ensures payment to the shipowner before the voyage begins
d) It defines how the charterer can terminate the contract
a)
Which of the following statements about laytime is true?
a) It applies only to time charters
b) It refers to the time allowed for loading and discharging cargo
c) The shipowner is always responsible for exceeding laytime
d) Laytime applies to the entire voyage duration
b)
Which type of charter is most commonly used in the offshore and specialized vessel markets?
a) Voyage Charter
b) Time Charter
c) Bareboat Charter
d) Consecutive Voyage Charter
c)
Under a Free In and Out (FIOS) clause, who is responsible for loading and discharging costs?
a) Shipowner
b) Charterer
c) Port authority
d) Freight forwarder
b)
What is the main advantage of a time charter for shipowners?
a) Charterer bears all risks
b) Regular income stream
c) Full operational control
d) Exemption from vessel maintenance
b)
Which clause allows NOR to be tendered even if the ship has not cleared customs?
a) WCCON
b) WIFPON
c) WIBON
d) Near Clause
a)
What are the five requirements for a valid Notice of Readiness (NOR)?
- The vessel is an arrived vessel
- The vessel is ready to receive or discharge cargo
- The NOR is tendered to and received by the proper person
- The NOR is tendered in a contractual way
- The NOR is tendered at a time allowed by the charterparty
What is the purpose of the lay/can (laytime/cancellation) clause?
Answer: It allows the charterer to cancel the contract if the vessel does not arrive by the Expected Readiness to Load (ERL) date.
Explain the risk of payment defaults in a charter chain.
Answer: If a sub-charterer defaults on payment, the primary charterer may struggle to pay the head charterer, causing financial strain across the entire chain. This risk increases in volatile markets.
What are the four main stages of a voyage charter?
- Preliminary voyage to the specified port of loading
- Loading operation
- (Laden) Carrying voyage to the port of discharge
- Final discharging operation
What are the responsibilities of the shipowner and charterer during the loading stage?
The shipowner must ensure the vessel is ready to receive cargo, while the charterer must provide cargo alongside the vessel within the stipulated laytime
What is the difference between WIBON and WIPON clauses?
WIBON (Whether In Berth or Not): Allows NOR to be tendered even if the vessel is not at berth.
WIPON (Whether In Port or Not): Allows NOR to be tendered even if the vessel is not inside the port limits.
In a time charter, what happens if the vessel is under repair and cannot be used?
The charterer does not pay hire for the period the vessel is unavailable, known as the off-hire period. BUT if vessel is bunkering( required for the ship, laytime will count, on-hire continues)
What is a key disadvantage for a shipowner in a bareboat charter?
The shipowner has minimal control over vessel maintenance, creating risks if the charterer neglects upkeep.
