Maritime glossary

Charter party

The contract between a shipowner and a charterer for the hire of a ship or space on it.

A charter party is the contract between a shipowner and a charterer for the hire of a ship, or of space on it. It sets out the commercial terms of the voyage or period of hire, including freight or hire rate, laytime, demurrage, and the responsibilities of each side.

Types of charter party

The main forms are the voyage charter, where a ship is hired for a specific voyage; the time charter, where it is hired for a period; and the bareboat or demise charter, where the charterer takes over operation of the vessel itself. Each allocates costs and risks differently between owner and charterer.

Why the charter party matters

The charter party is where key figures such as laytime and demurrage are defined, so it governs how time and money are counted during a port call. Anyone arranging supplies or services for a chartered vessel works within the framework it sets.

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Related terms

Laytime Demurrage Bill of lading Port agent Disbursement account All glossary terms →

Frequently asked questions

What is a charter party?
A charter party is the contract between a shipowner and a charterer for the hire of a ship or space on it, setting out freight or hire, laytime, demurrage and each side responsibilities.
What are the main types of charter party?
The main types are the voyage charter (hire for a specific voyage), the time charter (hire for a period), and the bareboat or demise charter (the charterer operates the vessel itself).
What does a charter party contain?
A charter party sets the vessel and parties, the freight or hire rate, the cargo, the ports, laytime and demurrage terms, and the allocation of costs and responsibilities between owner and charterer.
What is the difference between a voyage charter and a time charter?
A voyage charter hires a ship for one defined voyage with freight paid per tonne or lump sum, while a time charter hires it for a period with hire paid per day and the charterer directing its commercial use.

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