Charter Party

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Charter Party

Summary of Charter Party

A maritime contract for the lease of all or part of a ship for a period of time or for a voyage or voyages. The expression is derived from the Latin carta partida, meaning “divided document,”because the charter agreement was written twice on one sheet of paper, which was then cut or torn in two halves so that each party to the transaction would have a complete copy of the terms of the charter. Charter parties can be divided into three categories:

1. Voyage charter, the vessel is hired to make a single journey between two prescribed points; the shipowner provides crew, fuel, and supplies.

2. Time charter: the vessel is hired for a fixed period of time to make multiple journeys over defined routes, or to carry cargo for the charterer wherever he may reasonably designate; the shipowner provides crew, fuel, and supplies.

3. Bareboat charter (or demise): the vessel is hired, usually for a fixed period of time, and all operating expenses (crew, fuel, supplies, et cetera) are provided by the charterer.

Each trade employs standard form charter parties.

(Main Author: William J. Miller)

Charter Party in International Trade

Meaning of Charter Party, according to the Dictionary of International Trade (Global Negotiator): A contract under which a charterer agrees to hire the use of a ship from a shipowner. The charterer in some cases will be empowered to issue his or her own bills of lading, known as charter party bill of lading, subject to the conditions of the original charter party contract. The charter party itself is not a bill of lading, but a contract between the shipowner and the charterer.

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