Common charterparty clauses and concepts

Before discussing in depth the typical clauses of each charter type, this chapter will focus on general questions, concepts and clauses commonly applying to all different charter types and shipping contracts. Various topics of considerable interest are examined, such as the standard elements and the layout of a charterparty, the identity of the contracting parties and the possibility of their substitution in a contract, the importance of an exact vessel’s description together with the crucial concept of vessel’s “seaworthiness”, as well as the different meaning of a “lay/can” term in a voyage charter comparing to a time charter. Moreover, critical shipping, chartering and legal concepts are further presented, together with a commentary on respective charterparty clauses. This analysis comprises cargo liability allocation and the “paramount clause”, the “war clauses”, terms concerning the effect of cost variations on the contractual relationship (e.g. “hardship clauses”, “bunker clauses”, “currency clauses”, “escalation clauses” etc.), the “doctrine of frustration” of the contract, “arbitration clauses”, time limits, “exception clauses” and the “force majeure clause”, liens and arrests, the concept of general average and the “New Jason clause”, the vessel collision rules and the “both-to-blame clause”, the “ISM clause” and finally the most recent “piracy clause”.