Topic 11 Yacht And Charter Agreements Flashcards
02
You are to conduct an on-hire survey on behalf of the Charterer of a yacht which has been demise chartered. Describe in general terms the nature and extent of such a survey which would be required to protect the Charterers interests. (20)
Conducting an On-Hire Survey on behalf of a Demise Charterer
On taking delivery of a demise / bareboat chartered yacht, legal responsibility for the operation of the yacht and any damage its operation may cause to third parties is transferred to the charterer. The charterer also becomes responsible for any damage the yacht may sustain under charter having promised to return the yacht to the owner in the same condition, fair wear and tear excepted, as that in which it was delivered.
To protect the charterer’s interest therefore, the person conducting the on-hire survey should:
• Obtain a copy of the charter and check that the yacht being offered meets in every detail the charter description; that the hull / machinery are in a condition required by the charter; and / or that the condition on delivery is agreed, particularly as relates to any damage / defects identified. This would include an underwater / out of water inspection unless there is clear agreement / insurance covering any such hidden possible damage.
• A full inventory of all equipment; machinery and / or navigational equipment / spares; cabin / galley equipment should be drawn up and / or agreed.
• A full inventory of life saving, firefighting and other safety equipment including its condition to be agreed.
• If the charter calls for the yacht to operate commercially, check that all statutory documentation is available and certificates are in force.
• The quantity / quality of all consumables on board e.g. bunkers, water, stores, spare parts, must be checked / agreed as the yacht must be redelivered with the same amounts or financial adjustments will be required.
• Where the charter involves a transfer of master and crew into the temporary employment of charterer (not a bareboat charter), crew qualifications, certificates / experience and general competence should be checked.
Q3
A United Kingdom registered pleasure yacht, which has previously operated only as a
‘pleasure vessel’, has been chartered on the basis of an ordinary form of time charter. As master of this yacht you are instructed to prepare the yacht for this charter.
Explain how you would perform this task. (20)
Preparing a “Pleasure Vessel” for Commercial Operation
If a “pleasure vessel” is to be chartered on the basis of an ordinary form of time charter, the Master will have to take certain measures to prepare the yacht for this commercial charter.
It will to necessary to obtain a copy of the time charter to establish the nature and extent of the use of the yacht that the charterer is entitled to under the terms of the contract. In particular, there is a need to identify the maximum number of guests the charterer is entitled to embark on any voyage, as well as the status of such guests (elderly / infirmed, children etc.) Confirm the duration and geographical location of voyages to be undertaken. These factors will all bear on the preparations to be made to ensure that on delivery the yacht is in every respect ready to fulfil the charterer’s requirements.
In particular:
• The yacht is now engaging in trade i.e. no longer operating as a “pleasure vessel. If the charterer can order an international voyage or the delivery port is outside the UK and depending on the size of the yacht, the number and / or status of the guests embarked, the yacht may need relevant Load Line and SOLAS Convention certificate / documents. The yacht should already possess any necessary MARPOL certificates / documents - these should be checked.
• Manning levels will have to be re-assessed with reference to geographical location and duration of voyages, type and number of guests that can be embarked, watch keeping arrangements etc. Appropriate navigational data will be required. Statutory minimum manning levels will be the same as for when the yacht is operated
As a pleasure vessel
• Lifesaving / firefighting equipment will have to be re-assessed in the light of voyages to be undertaken, numbers and type of guests to be embarked. Taking up the charter, the legal status of the yacht changes to that of a commercially operated vessel. As such it will have to comply with all statutory regulations
a) Define a standard time charter. (4)
b) Define a demise / bareboat charter. (2)
c) List the responsibilities of the owner / master for the ship engaged on a standard time charter. (6)
d) List the responsibilities of the owner / master for the ship engaged on a demise charter (6)
e) Describe how each of the agreements would affect the legal status of a pleasure vessel. (4)
a)TIME CHARTER
A time charter is a contract for the hire of a named vessel for a specified period of time. It may be thought of as equivalent to the hire of a chauffeur-driven car (the ship’s crew being the “chauffeur”). The majority of large commercial yachts operate under this type of contract. The charterer(s) agree to hire from the owner a named vessel, for an agreed period of time, for the charterer(s) sport and pleasure and subject to agreed restrictions. The hire period may be the duration of one voyage (a “trip charter”) or anything up to several years (a “period charter”).
b)BAREBOAT CHARTER
A bareboat / demise charter is an agreement for the hiring of a yacht, whereby no crew or provisions are included as part of the agreement. In a bareboat charter, the owner gives possession of the ship to the charterer and the charterer hires his own master and crew.
c)TIME CHARTER
Owner is Responsible for Running Expenses
• Manning and Wages,
• Repairs, maintenance and spares,
• Stores,
• Crew’s wages,
• Insurance, Hull and Machinery
• Technical aspects of vessel operation BUT NOT commercial aspects.
d)The demise charter has as its objective the transfer of complete possession and control of the yacht to the demise charterer. The effect is to put the demise charterer in the same legal position regarding responsibility for the safe operation of yacht as that of a registered legal owner. Thus a demise charterer is often referred to as the
“disponent owner”, having full legal accountability for any damage the yacht may sustain or cause to others and for the management of the master / crew and any damage they may cause.
e) Under United Kingdom regulations, a “pleasure vessel” is defined in basic terms as a pleasure yacht used by the owner, his immediate family and friends for sport and recreation, with no payments to the owner for such use. The regulations make no distinction between a registered legal owner and a disponent owner. Thus, a bareboat / demise chartered yacht used by the disponent owner as above (non-commercially) can still claim the leaal status of a “pleasure vessel”.
Time charter can not be a pleasure vessel, commercial operation
