Maritime Law

Yvonne Baatz

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CHAPTER 4 Charterparties

1 Introduction

A shipowner will wish to ensure that it makes as much profit from its ship as it possibly can. One means of achieving this aim is to charter the ship either on a time charter or on a voyage charter. A demise charterparty is a time charterparty usually for a long term such as ten years and the ship is in the possession of the demise charterer who crews, maintains and insures the ship.1 Demise

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charters are often entered into for tax reasons. They are in a small minority of charters, and this chapter will focus on the more usual time and voyage charterparties. In both these cases the ship remains in the possession of the owner who crews, maintains and insures the ship. However, there are very significant differences between time and voyage charterparties, most notably the manner in which the owner is paid. Under a time charterparty the ship is placed at the disposal of the time charterer for a period of time and the time charterer pays hire for every minute that it is so placed, unless the ship is off hire. Under a voyage charterparty the contract is for a voyage and the charterer pays freight and, if the time allowed at either the load or discharge port for the process of loading and discharging the cargo is exceeded, usually demurrage.

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