What is a charterparty?

What is a charterparty?

A charterparty, often referred to as a maritime contract, is a legal agreement entered into between a shipowner and a charterer for the hire of a ship or yacht. This contractual arrangement pertains to the transportation of passengers, cargo, or leisure activities.

In the realm of cargo transportation, a charter party serves as a detailed contract specifying the rights and obligations of both the ship owner and the charterer. Any disputes that may arise between them are typically resolved in a court of law or another agreed-upon forum, based on the terms and conditions articulated in the charter party. The term charterparty finds its origin in the French charte partie, meaning split paper, reflecting the practice of creating a document in duplicate for each party involved.

There are several types of charterparties, each designed for specific purposes:
  1. Demise (bareboat) charter: The charterer assumes responsibility for crewing and maintaining the ship during the charter period, effectively taking on the legal responsibilities of the owner.
  2. Time charter: The vessel is hired for a specified duration. While the shipowner manages the vessel, the charterer gives orders for its employment and may sub-charter the vessel.
  3. Voyage charter: The charterer hires the vessel for a single journey, with the shipowner providing the master, crew, bunkering, and supplies.

A significant distinction arises in a demise charter, where the charterer has complete control. In time and voyage charters, the shipowner retains operational control but may transfer certain responsibilities to the charterer during port stays, subject to agreed-upon laytime. Exceeding the laytime may result in demurrage payments.

From a legal perspective, charterparties and contracts of carriage differ. A charterparty establishes the agreement between a shipowner and a charterer, while a contract of carriage pertains to the shipper and the carrier. Legislation such as the US Carriage of Goods by Sea Act (COGSA) and the UK Carriage of Goods by Sea Act 1971, which incorporates the Hague-Visby Rules, does not apply directly to charterparties but does apply to bills of lading.

In cases where a bill of lading is issued to a charterer, questions may arise regarding the dominant document. The legal framework, including COGSA, may come into play depending on the circumstances. Lawsuits arising from charterparty breaches fall within admiralty jurisdiction, and if a breach creates a maritime lien, the suit may be in rem.

In the context of pleasure boating, bareboat yacht charters are prevalent, allowing individuals or companies to charter yachts without crew. Other clauses that may be included in charterparties involve bunkering, ship seaworthiness, ice, lighterage, negligence, and ready berth.

In summary, charterparties play a crucial role in the shipping industry, outlining the terms, responsibilities, and rights of parties involved in the chartering of vessels for various purposes.
Back to blog
UOL Case Bank

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
INSEAD
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law

    Terminology

    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory

    Exam-focused

    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.