Types of charterparty
In general, charterparties are contracts for the carriage of goods by sea (sometimes called contracts of affreightment), that is, contracts for the services of the ship-owner and his equipment.
Voyage charterparties are, today, less common than time charters. The basic rules are important, however, because, historically, the duties of a ship-owner under a voyage charterparty and under a bill of lading contract are the same (except that under a bill of lading contract the duties often cannot be excluded because of The Hague Rules, while there was no such limitation in voyage charterparties). Bill of lading contracts often incorporate charterparty terms. The problems caused by this are discussed later.
Standard forms are used which may have biases towards one or the other party. They may be the subject of considerable negotiation, often through shipbrokers. The ship is likely, at the time of chartering, not to be at the place where it is required. The charter will require it to proceed there: this stage may be called the ‘preliminary’ or ‘approach voyage’.
Duties of carrier
At common law (that is, if no written terms are agreed), the duties of the carrier are normally taken to be strict: to deliver the goods at the place designated in as good a condition as he received them unless prevented by Act of God, the Queen’s enemies, inherent vice in the goods, defective packing or by a general average sacrifice.
Sequence of operations
On the approach voyage, the duty is one of reasonable dispatch. Terms may be inserted into the charter to make arrival or departure by certain date’s conditions. More commonly, however, there is a cancellation clause, which gives the charterer the right to cancel if the ship does not arrive by a certain date. This is a facility for the charterer which he can, and often does, exercise ruthlessly: he can exercise it, even though the late arrival is excused by the terms of the contract, or causes him no prejudice and, unless it is otherwise provided, the charterer may refuse to tell a ship-owner who is plainly going to be late whether or not he intends to cancel on the stated date
Duties of charterer
The duties of a charterer are: not to ship dangerous goods (including goods dangerous politically, for example, cargo liable to seizure); to have his cargo ready so that delay is not caused to the ship, for example, by inability to berth because cargo is not available; and to load a full cargo (a lesser one would reduce the freight earned, problems arise regarding designations of the ship’s capacity) of the specified merchandise (other merchandise might attract a different rate of freight); and to designate in reasonable time a discharging port where appropriate.
Parties usually employ one of the standard forms, for example, ‘Bedtime’ with additions and amendments.
The key concept in this context is that of the ‘legitimate last voyage’. A charterer should not order a last voyage, which a reasonable charterer would expect to end after the express or implied tolerance. If such an illegitimate last voyage is ordered, the ship-owner would be entitled to refuse the order and call for the charterer to order a legitimate last voyage. If the charterer refused to do so, the owner would, in principle, be entitled to terminate.