Charterparty

A charterparty (sometimes charter-party) is a maritime contract between a shipowner and a hirer ("charterer") for the hire of either a ship for the carriage of passengers or cargo, or a yacht for leisure.

It means that the charterparty will clearly and unambiguously set out the rights and responsibilities of the ship owner and the charterers and any subsequent dispute between them will be settled in the court of law or any agreed forum with reference to the agreed terms and conditions as embodied in the charterparty.

A carrier will issue a shipper with a bill of lading, a receipt for cargo shipped which also serves as evidence of the contract of carriage.

[7] When a bill of lading is issued to a charterer by the shipowner, the question arises as to which is the dominant document.

In both USA and the UK, the COGSA legislation provide a statement of the minimum duties that a carrier owes to the cargo-owner.

In the reverse case, if a carrier issues a third-party shipper with a bill of lading that incorporates charterparty terms, the shipper/cargo-owner would not be liable for fees such as demurrage, which are payable only by a charter.

If a breach of charter terms creates a maritime lien, the suit may be in rem (i.e. against the vessel itself).