CHARTER PARTIES

Time Charter Party

Period of Hire and Re-delivery of the Ship

The ship can be hired for a number of calendar months or even for a number of years.

"The Owners let, and the charterers hire the vessel for a period of the number of calendar months indicated in Box 14 ...." (BALTIME, Clause 1).

A vessel can also be hired for one or several voyages but this is usually done under a “Trip Time Charter”.

The period of hire runs from the delivery date until the re-delivery date. This is the planned period of the time charter agreement called “flat period”. (See Gorton, L., Ihre, R. en Sandevärn, A., Shipbroking and Chartering Practice, London, Lloyd's of London Press, 1980, 163.)

The Owner has to deliver the vessel in a specific harbour (e.g. safe berth in a named port) or in any port in a safe area (e.g. Antwerp/Hamburg Range, inclusive). In that case, the Charterer has to name the specific harbour of re-delivery to the Owner at an agreed date.

Generally, the Owner needs to notify the Charterer a number of days in advance of the correct date on which the vessel will be delivered. Sometimes this period can be as long as 30 days with additional notifications of 72, 48 and 24 hours before the actual delivery.

Most time charters have a “Canceling Clause”:

"Should the vessel not be delivered by the date/time stated in Box 10, the Charterers shall have the option to cancel the Charter Party without prejudice to any claims the Charterers may otherwise have on the Owners under the Charter Party. …….” (GENTIME, Clause 1, Period of Delivery).

"If required by the Charterers, time shall not commence before ……… and should the vessel not be ready for delivery on or before …… but not later than ……. Hours, the Charterers shall have the option of canceling this Charter Party.

Extension of Canceling

If the Owners warrant ……….”.(NYPE, Clause 16, lines 205-218).

Since in most cases it is difficult to determine the correct date of re-delivery, the “flat period” as well as the date of re-delivery are preceded by the word “about”. Often, the “flat period” or the re-delivery date are completed by the words:

“±15 days in Charterers option”.

The Charterer must plan his last voyage in such a way so that he can re-deliver the vessel at the agreed date. If the Charterer re-delivers the vessel before, the date of redelivery, the Owner may nor refuse the vessel. He only has right on a compensation if he can prove that owing to this, he suffered a loss. Consequently, the Owner must do everything he can to find a new employment for his vessel.

Since, as mentioned above, it is usually difficult to determine the correct date of delivery, most time charter parties have a specific clause which deals with the last voyage of the vessel. In the BALTIME this is specified in the last part of Clause 7, R-delivery, lines 103-111:"

Should the Vessel be ordered on a voyage by which the Charter period may be exceeded the Charterers shall have the use of the Vessel to enable them to complete the voyage, provided it could be reasonably calculated that the voyage would allow re-delivery about the time fixed for the termination of the Charter, but for any time exceeding the termination date the Charterers shall pay the market rate if higher than the rate stipulated herein".

See also LINERTIME, Clause 4, Redelivery, (d) Last Voyage.

It should be clearly underlined that this clause is only applicable if the Charterer calculated or planned his last voyage reasonably to allow him to re-deliver the vessel on the expected date of termination of the charter. If the Owner can demonstrate that the Charterer has been unreasonable in planning his last voyage, then the Owner can invoke breach of contract and not only claim the higher market rate but also demand an extra compensation.

[ back to top ]