Charterparty for a Specific Voyage

Charterparty for a Specific Voyage

Unlike a bill of lading, which primarily serves as evidence of a contract, a charterparty is a contractual agreement in its own right. Charterparty agreements are generally classified into three main categories:

• Voyage charter.
• Time charter.
• Bareboat charter.

Under voyage and time charter agreements, the charterer is granted the right to transport cargo using the vessel. However, operational control and management of the vessel remain with the shipowner, who exercises authority through the vessel’s master and crew. In contrast, under a bareboat charter, the charterer assumes responsibility for provisioning the vessel and appointing the master and crew. Consequently, operational control of the vessel transfers to the charterer, and the shipowner is generally not liable for cargo loaded during the charter period.

Determining whether operational control has been transferred to the charterer turns on the parties’ intent. The most reliable criterion for determining control is identifying whether the vessel’s master is employed and supervised by the shipowner or the charterer.

In modern shipping practice, particularly in tanker operations, charter agreements frequently transfer operational control to the charterer. The principal distinction between a bareboat charter and voyage or time charters lies in the fact that under a bareboat charter, the vessel’s master acts as the representative of the charterer.

Essential Documentation and Information for Drafting the Contract

Voyage Charter Agreement

Fundamental Contractual Terms

Contracting parties generally enjoy full freedom in selecting the structure and form of the charter agreement. However, parties frequently prefer to use standardized forms approved by the Documentary Committee of the United Kingdom Chamber of Shipping.

The terms of such forms vary depending on the nature of the commercial activity, and a specific designation typically identifies each form. Nevertheless, the parties remain free to modify contractual terms in accordance with their commercial needs.

Typically, voyage charter agreements contain the following provisions:

• The shipowner undertakes to provide the vessel and disclose its capacity and classification status.
• The vessel must proceed to the loading port with reasonable and customary dispatch during the preliminary voyage before loading.
• The shipowner declares that the vessel is seaworthy and suitable for the intended voyage.
• The shipowner undertakes to transport the cargo to the designated port of discharge.
• The charterer undertakes to utilize the vessel’s full cargo capacity.
• The charterer agrees to pay freight based on the cargo’s weight or volume.
• Specification of marine risks.
• Terms governing loading and discharge operations, laytime, and demurrage rates.
• Cancellation clause allowing the charterer to terminate the agreement if the vessel fails to arrive at the designated port within the agreed timeframe.
• Clause requiring compliance with the Hague Rules.
• Amended Jason Clause applicable to bills of lading issued in or destined for the United States.
• Both-to-blame collision clause.
• Arbitration clause.
• Brokerage commission clause for agents and charter brokers.
• Limitation of liability clause.
• War risk clause.
• Incorporation of the York-Antwerp Rules governing general average.
• Provision relating to the master’s authority to sign bills of lading.

Implied Obligations in Voyage Charter Agreements

A general legal principle provides that courts do not imply contractual terms merely because their inclusion would have been reasonable for the parties. Nevertheless, legal authorities acknowledge that certain terms are inherently necessary to the agreement’s effectiveness. As recognized by Lord Wright, certain obligations are so essential to the validity and operation of the contract that they are presumed to have been intended by the parties, even if not expressly stated. Such implied obligations do not conflict with the parties’ contractual intentions.

Implied Obligations of the Shipowner

In voyage charter agreements, the shipowner is implicitly obligated to:

• Provide a seaworthy vessel.
• Ensure that the voyage is performed with reasonable dispatch.
• Avoid unjustifiable deviation from the agreed route.

These obligations may be modified or excluded by explicit contractual provisions.

Seaworthiness of the Vessel

At the commencement of the voyage, the vessel must be seaworthy and suitable for transporting the specified cargo during the particular voyage. Seaworthiness varies depending on the type of cargo being carried.

The shipowner is required to exercise due diligence and take all necessary precautions to ensure the vessel is prepared for safe navigation. A defense based on a lack of knowledge of a defect is not acceptable.

The shipowner’s obligation relates specifically to foreseeable maritime risks associated with the particular voyage and cargo. However, the shipowner is not required to guarantee that the vessel can withstand all extreme weather conditions.

Frequently Asked Questions Regarding Voyage Charter Agreements