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Shipping Management > Time Charter > Flashcards

Time Charter Flashcards

1
Q

what is time charter

A

A fully manned and equipped ship’s capacity is made available to a charterer (time
charterer) for a certain period of time and A ship **performs voyages as directed by the charterer **in return for remuneration (hire)

a contract under which a fully manned and equiped ship’s capacity is made available to a time charterer for a specific period

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2
Q

who bears the expenses of each voyages

A

the charterer bears the expenses connected with each voyage and pays hire to the owner based on the time the ship is at the charterer’s disposal

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3
Q

if something is not clear in the contract?

A

we will look at the Norwegian maritime code
how do we interpret the issues, we go to the law - English law or Norwegian Law (will state in the contract)

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4
Q

the ship

what ship would be used in time charter

A

a specifically named ship

the fate of the contract depends on the fate of the ship
if the ship is a total loss, the charter party is terminated

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5
Q

why would thre be more detailed description of ship in time charter compared to voyage charter

two reasons

A
  1. earnings of the charterer depend on the ship’s transport capacity and
  2. the charterer bears a number of costs that under voyage charter falls under the owner’s responsibility
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6
Q

the ship

what four elements will be included in the description of ship

A
  • Cargo capacity
  • Loading/discharging equipment
  • Speed and consumption
  • Seaworthiness
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7
Q

the ship

why net cargo capacity is the most importnt from charterer’s view

A

**Deductions from the total capacity for:
*** Fresh water, supplies, luboils, spare parts (normally decided by the owner, but the charter may impose limits in the contract, e.g., when the charterer wants to buy more bunkers as the ship is in a ‘favourable’ port – remember load lines!)
* Bunkers (normally decided by the charterer)

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8
Q

the ship: speed and consumption

  • The ship’s speed capability and fuel consumption are among the most important commercial/business features in the contract
A

the faster the speed, the more fuel is consumed

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9
Q

who pay and provide the bunkers
at delivery?
at re-delivery?

A

charterer

at voyage charter, charterer pay the freight including bunkers

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10
Q

what would happen if the ship use more bunkers than agreed

A

the owner will be liable for the expenses of extra-use
as there is a correlation between speed and fule consumption
and speed is monitored by the master from shipowner part

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11
Q

seaworthiness

NMC 372
the ship shall satisfy the requirments of ordinary trade in the trading area
Special trading areas will normally be for the account of the charterer (the charterer’s expenses)

A
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12
Q

delivery of the ship

A

where to deliver
and when will be deliver

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13
Q
  1. place of delivery
  2. time of delivery
  3. last day of delivery (cancellation right)
A
  1. agreement as where delivery is to take place
  2. time of delivery - specificed within a margin
  3. the latest date is considered a “cancellation date”, such that delivery after this dte entitles the charterer to cancel
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14
Q

what’s the requirement of delivery of the ship

A
  1. the vessel arrived at the designated palce
  2. the ship is ready for loading (seaworthiness)
  3. notice of readiness is given
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15
Q

notice of delivery

A

when the ship arrives at the contractual delivery port in a timely manner, a notice of readiness will be given to the charterer

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16
Q

“on hire survey”

  • “on charter certificate” / “on hire certificate”
A

the vessel will be inspected when it is delivered
- to determine whether the ship is seaworthiness
- and to determine the extent of any damage to the vessel
- secure evidence regarding the condition of the ship at the time of delivery

17
Q

what is redelivery

A

the end of the contract

18
Q

what are the condition of “redelivery”

A
  1. the ship should be located at the designated place of redelivery
  2. ship should be free of carago - the cahrterer’s commercial use of the vessel come to an end
  3. ship is in the same good order and condition as when delivered
19
Q

NMC 389 exceed the charter period
what is underlap
what is overlap

flat period - eg. 12 months

20
Q

what happened if the ship is redelivered too early (underlap)

A
  1. the owner is obligated to take the ship
  2. shipowner could claim for damages
21
Q

distinguish between employment and navigation

A
  1. charterer determines the type of voyage the ship is to perform
  2. the master decide the navigation, sailors
22
Q

off-hire
NMC 392

A

the charterer’s duty to cover “expenses relating to operation of the ship” does not apply when the ship is off-hire

if the ship goes off-hire while in port, the port expenses relating to the off-hire period are for the owner’s account

23
Q

unpaid hire cause serious issues for owner

what’s the risk for shipowner if charterer didnt pay hire on time

A

if the correct amount of hire is not paid at the correct time, the owner may suffer liquidity problem

the hire would have been intended to cover his expenses in the coming month - interest and principal on his mortgage loan, insurance premium, crew wages, etc.

24
Q

Page 520 - 521

hire payment time

A

the first payment is due when the ship is delivered

then hire is payable In advance every calendar month (if mid-month then until mid-month)

25
Q

hire place of payment

A

the charter party from the owner will determine where hire is to be paid

26
Q

NMC 391
delayed payment of time charter hire

27
Q

off-hire

Baltime Clause 6 Hire

A

strict regulations - any breach of obligation to pay hire trigger a cancellation right

in the default of payment the owners shall have the right of withdrawing the vessel from the service of the charterers, without noting any protest and without interference by any court or any other formality whatsoever and without prejudice to any claim the owners may otherwise have on the charterers under the charter

28
Q

hire payment

Shelltime 4 Clause 9

A

in default of such proper and timely payment

29
Q

off-hire

NMC 392

A

whether loss of time is due to “hindrance on the part of the owner” is not a question of fault,
- there is no need to consider whether the owner or anyone for whom he is responsible can be blamed for what has occurred
- if the cause of the loss of time rests with the owner, the underlying reason is irrelevant (except if it was casued by charterer’s negligence)

30
Q

off-hire
2-step test (NMC)

A
  1. if there is an accident happened rests with the owner
  2. if this occurence caused time to be lost
    - an engine breakdown during a voyage will cause loss of time
    - but occur while ship lying at the port may not be that significance
31
Q

loss of time circumstances for which the charterer is responsible***

A

P529 - 530

32
Q

settlement of off-hire

Shipping Management (3 decks)

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