CHARTER PARTIES

Drawing up a Charter Party

Charter parties come in two different forms:

a. in an older form or traditional form;
b. in a new form, in boxes, called the "box layout".

In the older charter parties the clauses succeed each other in the form of an unbroken text with the necessary blank spaces which must be filled in by the contracting parties. The AMWELSH 93 shows such a charter party.

More and more the so-called box arrangement or box layout is used (see the GENCON). This charter party has two parts: part I is composed of a number of boxes that must be filled in by the contracting parties (e.g. the name of the ship, the characteristics of the ship, the port of loading, the discharging port, etc.). Part II gives all the printed clauses which can be adapted if necessary. As said before, a number of additional clauses can be added and eventually also addenda or a "side letter". A voyage charter party GENCON in "box layout" and a typical time charter party BALTIME will be discussed in detail.

The charter party is usually drawn up by the Shipbroker or by the chartering broker. He must do this with the greatest care by filling in the blank spaces, by amending the printed text where necessary and by adding the necessary additional clauses and addenda to the printed text. Nothing may be crossed out, added or changed to the charter party without the preceding authorization of the other party (the freight broker or the Shipbroker if the freight broker establishes the charter party). If certain clauses have been added to the charter party (e.g. the New Jason Clause, the Both to Blame Collision Clause, e.a.) it is not enough to simply refer to those clauses but the complete text of such clauses must be incorporated in the charter party so that everyone, who is involved in the chartering, can become acquainted with them.

Drawing up a charter party is in fact a labour-intensive task whereby, frequently, oral agreements must be confirmed, checked, possibly improved via telex or any other means of communication and the going back and forth of sometimes endless messages can often take much time so that the core of the matter is frequently already settled before the parties concerned, which find themselves sometimes thousands of kilometres apart have a chance to read the final charter party, not to mention to sign it.
Several times we referred to the atmosphere of trust in which parties must act and it goes without saying that dishonest persons will immediately be put out of business. The introduction of fax and e-mail have made things a lot easier.

We insist once more to the fact that when the broker acts in the name of his principal his signature or name must followed by the words "as agent (or broker) ........ only".

If several original charter parties must be delivered (e.g. in case of a documentary credit) then each original must bear the mention "First Original", "Second Original" etc.

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