Charters are of various kinds. A charter party which turns over the full control and operation of the ship to the charterer is called a demise of the ship. This may be for a fixed term, or for a particular voyage. In commercial practice, however, charters for a fixed term, that is to say time charters, seldom amount to a demise of the ship, but are usually mere contracts of affreightment. A charter party for a particular voyage is called a voyage charter. In usage such a charter may amount to a demise or may not, depending on whether or not the full control and operation of the ship is surrendered to the charterer. A charter which amounts to a demise is sometimes termed a bare boat charter. Under a charter which amounts to a demise, the owner will require payment of the charter money or freight in such installments as are agreed, the maintenance of his ship in good, seaworthy condition, protection against maritime liens and the prompt payment of all her expenses, and her return to him in like condition as when taken at the termination of the contract. The charterer will require undisturbed possession of the ship so long as he is not in default and agrees, that in event of default, the owner may cancel and resume possession. Provision should also be made for insurance and stipulated value in event of damage or total loss.
17. Subcharters.—
In the absence of any prohibition in the original charter, a charterer may execute a subcharter or may assign the original charter.
18. Provisions in Charter Parties.—
The legal construction of a charter party is governed by the rules of the law of contract. Material representations of fact contained in the instrument as inducements to the contract must be true or the contract will not be binding on the opposite party. Such representations are statements relating to the size, capacity, speed, condition and location of the ship.
(a) Safe Port.—
Among other provisions of the contract, especially in time charters, is usually one to the effect that the vessel is to be employed only between safe ports. A safe port is one in which the physical conditions do not ordinarily expose a vessel to danger. Thus a port entirely exposed to the weather has been held unsafe, as have ports blocked by dangerous bars. A port in which the vessel would be liable to forfeiture in time of war because of her nationality has been held unsafe.
(b) Insurance.—
Where a time charter provides that the owner shall pay for the insurance the reference is to insurance for the benefit of the owner and not that of the charterer.