1. Definitions.—
Contracts of affreightment are for the carriage of goods in vessels. This definition is sufficiently comprehensive to include contracts evidenced by bills of lading and charter parties. In practice the expression, "contracts of affreightment," is commonly used in a somewhat narrower sense to indicate those cases in which a vessel is operated by her owners on their own account, contracting directly with the shippers.
A bill of lading is the document issued for carriage of goods which form only a part of the cargo; it is both a receipt and a contract of carriage.
A charter party is a contract in writing by which the shipowner lets the ship in whole or in part. It corresponds to a lease of lands or buildings. The name comes from the fact that it was formerly prepared on a card which was then cut into two parts from top to bottom (carta partita) and each of the parties retained one for production when required and thus prevented counterfeiting.
By an order dated October 1, 1920, made pursuant to the provisions of the Merchant Marine Act (see Appendix), the Shipping Board requires two certified copies of every charter or contract of affreightment made on American or foreign steam or sailing vessels leaving continental United States to be filed with the Chartering Executive Committee, 45 Broadway, New York, which will then issue a certificate of filing. Unless this is done, clearance will be refused the vessel; but where there is not time to file certified copies before sailing, a letter or telegram to the Committee, giving all details of the contract, will answer the purpose. General cargo and passenger vessels, those in ballast and those carrying cargo for owners are not subject to this regulation.
Freight is the price of the carriage of goods by sea under a bill of lading, and also the sum agreed on for the hire of the ship under a charter party.
Before discussing the particular features of these contracts it will be well to observe certain elements which enter into substantially all contracts for the carriage of goods for hire. These are the warranty of seaworthiness, the obligation against deviation and the exemption of the carrier from liability on account of the perils of the sea.
In the Chapter, "Liabilities and Limitations," § 10, will be found a discussion of the Harter Act. This must be taken into consideration in connection with these subjects.