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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. (2025). 9780314199492, West. ISBN 9780314199492
Charterparty is a contract of carriage of cargo in the case of employment of a charter boat. 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. The name "charterparty" is an anglicisation of the French language charte partie, or "split paper", i.e. a document written in duplicate so that each party retains half.The Latin term charta partita is a back-formation, and not a true etymological source.
A bareboat charter operates as a long lease of the vessel, with the charterer completely in charge. In time and voyage charters, the shipowner still runs the ship, but when in port the charterer becomes responsible for loading and unloading the ship within the agreed period of laytime. If the charterer exceeds the allowed laytime, demurrage"Demurrage" is a form of liquidated damages, a penalty for exceeding laytime. becomes payable.The Suisse Atlantique" case
In a voyage charter, the route is pre-arranged and the charterer has little scope to interfere with the programme. By contrast, the time charter is almost a halfway-house between a demise charter and a voyage charter, in that the charterer decides on the voyages and the ports, and instructs the shipowner's crew to comply. This can lead to issues of indemnity: whereas the shipowner in a voyage charter takes responsibility for the ship, in a time charter the shipowner may need to be indemnified against losses or liabilities Proximate cause by the charterer.
The US Carriage of Goods by Sea Act (COGSA), and the UK Carriage of Goods by Sea Act 1971 (which ratifies and incorporates the Hague-Visby Rules) do NOT apply to charterparties, but do apply to bills of lading (and similar documents such as ships delivery orders, or sea waybills).Carriage of Goods by Sea Act 1992
When a bill of lading is issued to a charterer by the shipowner, the question arises as to which is the dominant document. The Draupner 1910 AC 450, HL The Henryk Sif 1982 1 LL R 456 If a shipper returns a bill of lading to a carrier (perhaps as a pledge), the carrier will hold it only as a token of the pledge.
In both USA and the UK, the COGSA legislation provide a statement of the minimum duties that a carrier owes to the cargo-owner. If the charterer has shipped cargo, charterparty document may incorporate the COGSA or the Harter Act, since the charter is also a cargo-owner. Such an incorporation is valid and enforceable even without the issuance of a bill of lading. 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.
Lawsuits brought for the breach of an obligation under a charterparty fall within admiralty jurisdiction. If a breach of charter terms creates a maritime lien, the suit may be in rem (i.e. against the vessel itself).
In pleasure boating, the most frequent charter arrangement is bareboat yacht charter. A voyage or time charter is used only for larger yachts and is uncommon. Yacht charter flotillas are mostly made up of boats belonging to individuals or companies who only use their boats on a part-time basis or as an investment. A recent innovation in recreational boating is "time-share chartering" whereby several charterers are assigned a certain number of days per month or season in a manner which resembles real-estate time-share.
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