Voyage Charters Historical background and general notes …
  • General Notes

    When the agreement is for the employment of the whole ship on a given voyage or voyages or for given period of time the contract of affreightment is almost always contained in a document called a charterparty, the person entitled to the use of the ship is called the charterer, and the ship is said to be chartered or under charter.

    Almost until the second half of the nineteenth century charterparty contracts usually were made under seal. They embodied the terms upon which the shipowner lends the use of the ship, and contained stipulations as to the rate of remuneration, the nature of the voyage, and the time and mode of employing the vessel.

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  • The common law duties

    The common law rule stated in Paradine v Jane (1647) Aleyn 26 insisted on holding the parties to their bargain, and accordingly, mutual obligations of a shipowner and a merchant, so called mutual covenants, were almost absolute – save few exceptions such as acts of God, King’s enemies and perils of the sea.

    The owner with the cargo on board shall proceed without undue delays and reach the place named in contract, and there deliver the goods to the receiver. The merchant shall provide for the goods, load them on board and pay freight. Unless there was a breach of condition precedent, each party was obliged to perform its part and had a remedy in action for damages.

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  • Formation of charter

    The parties’ agreement may be made in the course of written exchanges, e-mails, or during conversations and/or meetings, therefore so long as the parties have reached complete agreement, formal exchange of signed charterparty is unnecessary.

    To be a good contract there must be a concluded bargain and a concluded bargain is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties. Because it may leave something which is still to be determined but then that determination must be a determination which does not depend upon the agreement of the parties. Per Lord Dunedin in May v Butcher Ltd [1934] 2 KB 17 at p 21
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Standard sets of clauses in voyage charterparty contracts
Introductory clause
This clause identifies the contracting parties, the vessel, and the agreed voyage. Cargo capacity is usually expressed in terms of deadweight tonnage which, when translated, means the weight of cargo the vessel is capable of carrying when loaded down at its maximum permitted draught. Read more →
Cargo clauses

Clauses with the description of the type and quantity of cargo is likely to be specific including stipulations for the charterer’s liability for deadfreight.

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Freight clauses

clauses specifying the agreed rate of freight, the unit of measurement of cargo to which it applies, and the time and place of payment. It may be required that part of the freight to be paid in advance and the balance on delivery of the cargo. Additional clauses provide for the currency in which the payment is to be made.

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NOR and Laytime provisions

These provisions specify whether charterparty is a berth or a port charter and requirements as to validity and effectiveness of NOR as well as amount of time allowed for loading and unloading the cargo.

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Bills of Lading/Employment and Indemnity Clauses

These clauses specifies how Bills of Lading shall be presented and signed by the Master and also specify Charterers’ obligation to indemnify the Owners against all consequences or liabilities that may arise from the signing of bills of lading as presented.

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Additional clauses

Nowadays all standard charterparty forms apart from various and numerous amendments are usually also supplemented with sets of additional clauses, such as: ISPS Clause, Ethical Policy Clause, Anti-Corruption Clause, ISM Clause, ITWF Clause and many more depending on trade.

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Originally featured for a single voyage, voyage charter contract can embrace several voyages either consecutive, then called a ‘consecutive voyage charter’, see for example Suisse Atlantique Sociètè d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale [1967] 1 AC 361 and Anglo-Saxon Petroleum Co. Ltd v Adamastos Shipping [1957] 2 W.L.R. 968; or occurring at irregular intervals, also called an ‘intermittent voyage charter’, see as an example The Oakworth [1975] 1 Lloyd’s Rep. 581

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