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Time charter party clauses for cargo ships employment
What is Time charter party
A time charter - is a contract for the hire of a named vessel for a specified period of time. - may be thought of as equivalent to the hire of a chauffeur-driven car (the ship’s crew being “the chauffeur”).
A general purpose dry cargo time charter party will usually incorporate clauses covering at least the basic
provisions tabulated below.
The provisions may be covered in different charter parties by clauses bearing different names, or by numbered
clauses without names.
Clause name & matters covered by clause
Preamble :Identity of parties; identity and technical specifications of vessel; present position of vessel.
Period/ Port of Delivery/
Time of Delivery: specifies the period of hire, the port or place of delivery, and the date and time of delivery.
The place, time and conditions of delivery and redelivery of the vessel are key points in a time charter agreement,
since the amount of the owners’ and charterers’ income may hinge upon them, and disputes can easily arise in cases
of misunderstanding. The charter party’s provisions covering these matters should be carefully noted and adhered to
by the master.
Trade :Legality of vessel’s employment; legality of cargoes carried; safety of ports used;
prohibition of cargoes injurious to ship.
Owners to Provide : Owners’ obligation to pay for specified items.
Charterers to Provide :Charterers’ obligation to pay for specified items.
Bunkers : Charterers’ obligation to buy bunkers remaining on board at delivery port; owners’
obligation to buy bunkers r.o.b. at redelivery port; minimum quantity of bunkers to be on
board at redelivery.
Hire : Charterers’ obligation to pay hire at the specified rate at the specified intervals until
redelivery; owners’ right to withdraw vessel for default on hire payments.
Redelivery : Charterers’ obligation to re-deliver vessel in same condition as when delivered (fair wear
and tear excepted); redelivery place, date and time; giving of notice of redelivery by
charterers; provisions where vessel is on a voyage at agreed redelivery time.
Cargo Space : Agreement that entire carrying capacity of vessel will be at charterers’ disposal.
Master : Master’s speedy prosecution of voyages; master’s and crew’s assistance to charterer;
master’s obedience of charterers’ orders relating to vessel’s employment, agency, etc.;
charterers’ indemnification of owners against consequences of owners’ servants signing
bills of lading or other documents, or complying with charterers’ orders, etc.; exclusion of
owners’ liability for cargo claims; owners’ agreement to investigate charterers’ complaints
about crew.
Directions and Logs :Charterers’ obligation to provide master with voyage instructions and information;
obligation of master and engineers to make voyage logs available to charterers and their
agents.
Suspension of Hire, etc. :Suspension of hire payment for duration of any “downtime” of vessel in specified
circumstances; charterers’ responsibility for loss of time in specified circumstances.
Cleaning Boilers :Owners’ obligation to clean boilers with vessel in service, if possible; charterers’ obligation
to allow boiler cleaning time where necessary; suspension of hire when boiler cleaning
time extends beyond specified time.
Responsibility and
Exemption:
Conditions under which owners will be responsible for delay in delivery, delay during the
charter, or loss or damage to cargo; owners’ exclusion of responsibility in all other
circumstances; charterers’ responsibility for loss or damage to vessel or owners caused by
improper or negligent loading, bunkering or other acts on their or their servants’ part.
Advances :Charterers’ obligation to advance necessary funds to master for ordinary disbursements at
any port; deduction of advances from hire.
Excluded Ports :Prohibition on charterers from ordering vessel to a place where disease is prevalent or
which would be beyond the agreed limits of the Crew Agreement, or to any ice-bound
place.
Loss of Vessel :Cessation of hire from date of loss of vessel.
Overtime :Owners’ obligation to make vessel available for work 24h per day if required; charterers’
obligation to reimburse owners for crew overtime.
Lien :Owners’ lien for claims under the charter on cargoes, sub-freights and bill of lading freight.
Salvage :Equal sharing of salvage money after deduction of master’s and crew’s proportions and
other expenses.
Sublet :Charterers’ option to sublet vessel; original charterers’ responsibility for due performance
of charter.
War :Prohibition on charterers from using vessel in war zones or for carriage of goods which will
expose her to risks of capture, etc.; charterers’ responsibility to pay any war risks
premiums, hire for time lost due to warlike operations and increased costs due to war zone
operations; liberty of vessel to comply with flag State orders during war; cancellation of
charter by either party, and redelivery of vessel, if flag State becomes involved in war.
Cancelling :Charterers’ option of cancelling charter if vessel is not delivered by agreed date; charterers’
obligation to declare intention to cancel.
Arbitration: Reference of disputes to arbitration in London or other agreed place; nomination of
arbitrators by parties; umpire’s decision where arbitrators disagree.
General Average :Rules under which any General Average is to be settled; non-contribution of hire to
General Average.
Commission :Amount of (brokerage) commission to be paid by owners, and party to whom payable.
Read more on :
Voyage charter party clauses
Voyage charter party laytime calculation
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- Delivery conditions in a time charter agreement
A time-chartered vessel goes “on hire” when she is delivered to the charterers at the agreed place and time, is fully
at the charterer’s disposal and is in a fit condition for the employment contemplated...
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- Charty related problems
If charterers repeatedly reject the vessel on grounds of unclean holds or tanks
most charter parties have clauses dealing with cleaning of compartments before loading. Some charter parties give
the master sole authority to decide when the vessel is sufficiently clean for loading to commence, or If charterers cannot provide a cargo on arrival or If charterers cannot provide the agreed cargo quantity...
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- Laydays and the cancelling date in a charter party agreement
Laydays refers to a period of specified days (e.g. “Jan 7/16”) during which owners must present the vessel for loading.
Laydays should not be confused with laytime, which is the period allowed to the charterers for loading and/or
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- Defining a voyage charter
During a loaded voyage a vessel must normally proceed to the destination port or place with “due despatch” (but sometimes “utmost despatch”) and always without deviation from the contracted voyage, which includes ports of loading and discharge (and their rotation), dates of loading and discharge where stipulated, voyage route and other agreed elements.
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- Time charter party clauses for cargo ships employment
A general purpose dry cargo time charter party will usually incorporate clauses covering at least the basic
provisions tabulated below.
The provisions may be covered in different charter parties by clauses bearing different names, or by numbered
clauses without names.
More .....
Summarized below seagoing cargo ship various employment guide:
- Charty party forms
defines the obligations, rights and liabilities of the shipowner and charterer. Recognised standard form (e.g. GENCON, BALTIME, NYPE)
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Nature of a time charter
The charterers agree to hire from the shipowner a named vessel, of specified technical characteristics, for an agreed period of time, for the charterer’s purposes subject to agreed restrictions.
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-
Voyage charter advantages
contract for the carriage by a named vessel of a specified quantity of cargo between named ports or places.
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- Terms of Bareboat charter and lease arrangement
The vessel owners put the vessel (without any crew) at the complete disposal of the charterers and pay the capital costs, but (usually) no other costs.
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-
Seaworthiness of vessel
A vessel must be fit to encounter the “ordinary perils of the sea” (e.g. bad weather) and other
incidental risks to which she will be exposed on the voyage..
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- International trade terms (INCOTERMS) in sea transportation
INCOTERMS is a set of rules, published by the International Chamber of Commerce, for the uniform interpretation of the most commonly used trade terms used in international trade contracts.
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- Money transfer procedure in sea transport
Money transfer system commonly used in overseas trade to enable sellers to obtain early payment, i.e. soon
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- Contract between cargo seller and buyer
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.
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- Parties involved in sea transportation of goods
Forming links in the transport chain- Sea carrier, Freight forwarder, shipper, consignee,agent & banks
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- Carriage of goods by sea act 1992 (COGSA 92)
Section 3 of COGSA 92 lays down guidelines establishing when liabilities under a bill of lading, sea waybill or
ship’s delivery order will be transferred to a party who is not an original party to the contract of carriage (i.e. an
endorsee or transferee). The party who takes or demands delivery of the goods to which a bill of lading, sea waybill
or ship’s delivery order relate becomes subject to the same liabilities as the original shipper..
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- Laytime interpretation rules
Rules, which were issued jointly by BIMCO, CMI, FONASBA and INTERCARGO, replace the Charter party Laytime Definitions 1980.
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- CIF ( Cost, Insurance and Freight ) used in international trade terms (INCOTERMS)
“CIF” means Cost, Insurance and Freight (paid to a named place), e.g. CIF London.- is a contract based on the discharge port
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- FOB ( free on board ) used in international trade terms (INCOTERMS)
“FOB” means Free On Board (named port of shipment), e.g. “FOB Newcastle NSW”. It is one of the most commonly used term (INCOTERMS) in sales contracts involving sea transportation of goods.
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- Common Chartering abbreviations
Many terms commonly used by shipbrokers and others involved in ship
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