Section 4

Question 1

Types of charter party.

Answer 1

• A Bare Boat or Demise charter
  
  • Long term charters, generally 10 years plus.
  • S/O may lease a bare ship to a charterer, often for the majority of the ship’s life.
  • Remuneration is paid by charterer to the ship owner at negotiated intervals per summer dead-weight.
  • The charter’s remuneration will be the freight and the hire earned.
  • Many commercial reasons for using a demise/bareboat charter rather than building own ship.
  • Sometimes used by government departments, banks, national industries, large shipping companies.
• Time charter
  
  • Ship is hired for a particular period of time.
  • Charterer trades the vessel in the manner they require, while shipowner retains the technical operation.
  • Sometimes the ship may be sub-let on a voyage charter or sub charter
  • Ship-owner provides the ship and the crew; and pays crews wages, stores, repairs and insurance (ships costs).
  • Charterer pays for the fuel, port and stevedoring charges (voyage costs).
  • Crew over time is sometimes met by charterer, sometimes the ship owner, depending on the reason for the over time
• Voyage charter / Tramping
  
  • Ship is hired to carry the charterer’s cargo between specified ports for one or more voyages.
  • Shipowner pays all costs and receives the freight at a rate per ton.
  • If the charterer fails to load full then he agrees to pay ‘dead freight’ for the balance space.
  • Shipowner appoints the Master and Crew & pays their costs, maintenance, bunkers & insurance.
  • Voyage charter may be entered into between a demise or time charterer and a shipper.
  • A Charterer may or may not be the shipper.
  • The Shipowner will be the ‘carrier’ in the c/p
• Contract of Affreightment (COA)
  
  • Contract of affreightment is a generic term which covers all contracts for the carriage of goods by both charter parties and bills of lading are contracts of affreightment.
  • It is also used in a more limited sense where it means a contract, by which the shipowner promises to satisfy the charterer’s need for transport capacity over a certain period of time, often one year or several years.

Question 2

Difference between voyage and time charter.

Answer 2

Question 3

War risks, ice, and clause paramount.

Answer 3

• War Risk Clause, under this clause the Master shall not be required to sign Bills of Lading for any place which in his or Owners’ opinion is dangerous or impossible for the vessel to go due to war.
• Ice Clause, gives protection to the Master’s action he may take if the ship is prevented from entering or leaving port because of ice or if the vessel is threatened by ice in port.
• Clause Paramount, the clause that invokes coverage by the Hague Rules.

Question 4

Deviation, bunker, sublet and cesser clause

Answer 4

• Deviation Clause, states for what purposes a vessel may deviate. Without a deviation clause in the charter party, if a vessel deviates, it will be a breach of the charter.
• Bunker Clause, gives the vessel the liberty to deviate to any port to take bunkers as part of contracted voyage. The charterers shall pay for the vessel’s bunkers at port of delivery.
• Sublet Clause, the Charterer may sub-let the Vessel but shall remain responsible to Owner for fulfilment of the original Charter Party.
• Cesser Clause: This clause states that the charterers’ liability will cease on shipment of cargo, payment of advance freight, dead-freight, and demurrage.

Question 5

BIMCO Terms:
SHEX
SSHEX
FHEX
UU
SATPMSHEEXUU
EIU

Answer 5

SHEX - Sundays and Holidays excluded.
SSHEX - Saturdays, Sundays and Holidays excluded.
FHEX - Fridays and Holidays excluded.
UU - Unless used.
SATPMSHEEXUU - Saturday Afternoon, Sundays and Holidays Unless Used.
EIU - Except If Used.

Question 6

Commencement of laytime.

Answer 6

3 conditions:

1. The vessel must arrive before the cancellation date and within the port limits or the berth.
2. Vessel must, in all respects, be ready to load. i.e.,
   ▪ Cargo gear must be rigged and ready for use.
   ▪ Holds must be clean, dry, dunnaged and fumigated.
   ▪ Survey certificates obtained.
3. When the vessel has arrived and is ready to load, the master can serve the Notice of Readiness (NOR). The NOR must then be signed by the charterer and the Master must keep a copy.

Question 7

Methods of computing laytime.

Answer 7

1. Running days, consecutive calendar days to count, which follow each other, immaterial whether a holiday or not, and also immaterial of the number of hours of work per day.
2. Working days, a day on which work is normally done. Immaterial of the number of hours work is done per day. The difference from the running day is that this system doesn’t count non-
   working days.
3. Weather working days, It is similar to working days but any interruption time due to bad weather is excluded if it
   was within that normal working time.