What is a Charter Party and what are its main types?

• A. A contract to hire a vessel; main types include voyage charter, time charter, bareboat (demise) charter.
• B. A document transferring ownership of a vessel.
• C. A guarantee of vessel speed.
• D. A contract for freight insurance.

Answer: (A)

A charter party is a contract to hire a vessel, setting out how the ship will be used, who pays, and who is responsible for operations during the hire. The main forms describe different levels of control and obligation.

In a voyage charter, the vessel is hired for a specific voyage. The shipowner operates the vessel and crew, and the charterer pays freight for that voyage. The charterer directs the cargo handling and voyage plan, but ownership and crewing remain with the shipowner.

In a time charter, the hire covers a set period. The charterer controls the vessel’s commercial use during that time, deciding which cargoes to carry and where to sail, while the shipowner furnishes the crew and responsible for the vessel’s day-to-day seaworthiness.

In a bareboat (demise) charter, the charterer takes full possession and control of the vessel for the period, including crewing, maintenance, and operation, effectively acting as the vessel’s owner for that time.

This distinction explains why the option describing a contract to hire a vessel with these three main types best fits. It’s not about transferring ownership, guaranteeing speed, or providing insurance.