Charter party clauses

The contract has several layers

A charter party is rarely one uninterrupted document. The commercial agreement is assembled from a fixture recap, completed boxes or part one, a named printed form and negotiated rider clauses. Attachments, vessel questionnaires and incorporated clauses may add further detail.

Fixture recap

Records the main terms agreed through offers and counters, together with the form and riders that complete the bargain.

Completed boxes or part one

Insert the fixture-specific names, dates, places, cargo, rates and other particulars into the form.

Printed form or part two

Provides the standard contractual structure chosen for the trade and charter type.

Rider clauses

Add, replace or qualify provisions for the particular parties, vessel, cargo and programme.

Do not assume the hierarchy. Check the precedence provision and the words used in the recap. A specifically negotiated term commonly controls an inconsistent general term, but the actual documents may set a more detailed order. Where two riders conflict, their numbers or dates do not reliably solve the issue by themselves.

The recap deserves the same care as the long form. Once stated subjects are lifted, it can be contractually decisive before a formal document is signed. Our fixture guide explains where subjects and the recap sit in the commercial sequence.

Clauses allocating money and payment

Read the payment mechanism as a chain. The amount means little without the calculation base, due date, documents, permitted deductions and consequence of late payment.

Freight or hire

A voyage charter should state whether freight is per tonne or lumpsum, which quantity applies, when freight is earned, when it is due and what documents trigger payment. A time charter should state the daily hire, payment interval, delivery point, currency and the machinery governing a late or disputed payment.

Commission and deductions

Identify each commission, its percentage, its beneficiary and the sums to which it applies. Freight, hire, deadfreight and demurrage do not necessarily share one commission basis. The charter should also make clear which advances, disbursements, off-hire amounts or claims may be deducted and how they are supported.

Lien and security wording

Lien clauses are intended to protect payment claims against specified property or sums. Their practical reach can depend on the contract chain, possession, cargo ownership, bill of lading terms and the place where action is contemplated. Flag the clause early. Exercising a lien is not a routine collection step and should not be improvised from a recap summary.

Taxes, dues and additional cost

Allocate port costs, canal tolls, cargo dues, emissions-related amounts and new or exceptional charges rather than relying on a general label. The answer can differ between a voyage charter and a time charter, and a rider may move a cost that the printed form places elsewhere.

Clauses allocating time and delay

Laycan and cancelling

On a voyage fixture, laydays identify when the vessel may present for the cargo and the cancelling date gives the charterer an option if the contractual threshold is missed. Delivery and cancelling provisions perform a related role on a time charter. Notices, narrowing and any interpellation machinery need to be read with the dates, not after them.

Notice of readiness

The NOR provisions decide where, when and to whom notice may be tendered, what readiness requires and when the resulting time begins. Berth or port status, office hours, free pratique, customs and congestion wording can alter the calculation. A notice that looks regular may not start time if a contractual condition is missing.

Laytime, demurrage and despatch

The charter must define the allowance, loading or discharge rate, exceptions, turn time and whether time is reversible between ports or operations. The demurrage and despatch provisions then price excess time or saved time on the stated basis. Abbreviations in the recap need to be reconciled with the longer clause rather than read in isolation.

Our laytime and demurrage guide covers the time sheet and worked arithmetic. BIMCO's Laytime Definitions for Charter Parties 2013 is a useful publisher reference for defined terms, but a term only operates when the fixture adopts it in the relevant way.

Claims and time bars

A claim clause may require notice, a calculation and named supporting documents within a short period. Check whether the deadline runs from loading, discharge, redelivery or another event. A good claim file assembled after the deadline may still be contractually ineffective. Build document collection around the clause from the start of execution.

Vessel description and performance clauses

Description and suitability

Vessel name, class, flag, deadweight, dimensions, capacities, gear, hold or tank condition and other particulars determine whether the proposed ship can perform the fixture. Distinguish a warranted description from information given in good faith or subject to qualification. For a project or specialist cargo, drawings and questionnaires may carry more practical detail than the printed form.

Seaworthiness and maintenance

The charter allocates obligations concerning the vessel's condition at the relevant time and her maintenance during service. Read those provisions with exceptions, due-diligence language, class obligations and any cargo-specific cleanliness or fitness requirement. Avoid reducing a detailed obligation to the single word seaworthy in an internal summary.

Speed and consumption

Time-charter performance wording should identify the described speed, fuel consumption, grades and qualifying conditions. Weather thresholds, sea state, currents, good-weather periods, vessel condition and the ordered speed all affect how performance is assessed. The remedy and calculation provision matter as much as the headline figures.

Off-hire

Off-hire wording states when hire stops because a qualifying event prevents or limits the agreed service. Read the list or test of events, the required loss of time or service, exclusions, notice and the point at which hire resumes. An operational problem is not automatically off-hire. The clause must apply. Our time-charter guide puts that mechanism into the wider employment structure.

Deviation and route

Routeing, liberties and deviation clauses deal with departures from the expected prosecution of the voyage. The reason, authority, notice and allocation of resulting time and expense need to be checked together. A commercially sensible diversion does not answer the contractual question on its own.

Employment, ports, cargo and bills of lading

Trading limits and employment orders

A time charter gives the charterer commercial direction within an agreed range. Geographic limits, ice areas, seasonal restrictions, excluded countries, vessel capabilities and the contract's lawful-employment requirement define that range. Orders should be screened against the charter before the vessel is committed to the next leg.

Safe ports and safe berths

Port wording allocates risk around the place ordered and can include express safe-port or safe-berth obligations, qualifications and rights where conditions change. Physical access is only part of the review. Draft, berth dimensions, mooring, weather exposure, security and the vessel's ability to leave are among the facts that may matter.

Cargo description and exclusions

Define the commodity closely enough for the vessel, owner and charterer to assess carriage and cleaning exposure. Dangerous, contaminating, corrosive, heated, high-value or unusually sized cargo may need specific allocation. A general cargo label should not be used to hide a property that changes vessel suitability.

Bills of lading and indemnity

The charter party governs owner and charterer. A bill of lading may govern rights involving a shipper, receiver, bank or later holder. Check who signs, which charter terms are incorporated, how freight is shown, which bills the master may be asked to sign and what protection applies when charterer instructions expose the owner to a different cargo-document obligation.

External risk and compliance clauses

War and security

War-risk wording should address the decision standard, areas affected, rights to refuse or leave, alternative orders, additional premium, crew costs and the effect on freight, hire and time. The clause is an operating mechanism. It should work before the vessel approaches the area, not merely allocate blame afterwards.

Sanctions

Sanctions clauses commonly address representations, screening, prohibited performance, replacement orders and termination or indemnity consequences. The contractual clause does not replace counterparty, vessel, cargo and voyage screening. It allocates rights between the parties if the compliance position affects performance.

Ice, strikes and unexpected events

Ice and strike clauses allocate specific delay, access and cost risks. Force majeure should not be treated as a free-standing escape label for every unexpected event. The charter needs operative wording that covers the event and states its consequence. Other clauses may already allocate the same delay more specifically.

Emissions and regulatory compliance

Where a trading programme creates emissions reporting, allowance, fuel or data obligations, the charter should identify who supplies information, who performs each compliance step, how related cost is calculated and what happens when data is late or disputed. Generic compliance wording does not settle a commercial allocation that depends on vessel operation and employment orders.

Anti-corruption

Anti-corruption provisions should support refusal of improper payments, notification and a clear route for lawful alternatives without leaving the vessel and cargo in an unmanaged delay. The clause belongs with the agent-appointment and port-call process, where the practical issue may first appear.

Law, arbitration and notices

Governing law and dispute forum are not closing boilerplate. They determine how the charter is interpreted, where a dispute is decided and which procedural rules apply. Confirm the law, arbitration seat or court, applicable rules, number or appointment of arbitrators and any small claims procedure in the actual wording.

Notice provisions decide how contractual communications are served. Check the required address, method, recipient, deemed-receipt mechanism and time zone. Operational messages sent through a familiar broker or agent may not satisfy a formal notice clause. Keep contractual notices identifiable and retain evidence of transmission and receipt.

GENCON 2022 and NYPE 2015

GENCON 2022 is a general-purpose voyage charter form. Its structure addresses one cargo movement, including freight, loading and discharge, laytime, demurrage and voyage risks. NYPE 2015 is a dry-cargo time-charter form. Its structure addresses delivery, hire, employment, bunkers, performance, off-hire and redelivery over time.

They are examples of different allocations, not interchangeable templates. The appropriate form follows the charter type and trade, then the recap and riders adapt it to the fixture. Our guide to charter party types maps the broader range of dry, tanker and specialist forms. The publisher's forms and clauses remain the authoritative source for their wording.

A practical first-pass reading order

1. Confirm the parties, vessel, charter type, named form and edition.
2. Read the fixture recap, completed boxes and every rider before relying on the printed form.
3. Find the precedence clause and mark every express deletion or amendment.
4. Check freight or hire, commission, due dates, supporting documents and deductions.
5. Check cargo, quantity, ports, laycan or delivery window and cancellation machinery.
6. Work through NOR and laytime on a voyage charter, or performance and off-hire on a time charter.
7. Check trading limits, cargo exclusions, bills of lading, war risk and sanctions.
8. Mark every notice deadline, claim time bar and document requirement.
9. Confirm governing law, dispute forum and formal notice details.
10. Build a one-page execution sheet from the agreed wording and verify it against the final charter.

The reading order follows commercial exposure, not clause number. It finds the provisions most likely to affect tomorrow's instruction or payment before moving to less immediate detail.

Negotiation checklist

• Does the vessel description match the cargo, ports and intended service?
• Can each rate, quantity, commission and payment date be calculated without an assumption?
• Do the recap and riders use the same defined terms as the printed form?
• Is the document precedence clear where wording overlaps?
• Are readiness, time counting, delay and off-hire consequences operationally workable?
• Do the trading, cargo, sanctions and war-risk provisions match the intended programme?
• Are bunker quantities, qualities, prices and performance assumptions measurable?
• Can the required notices and claim documents be produced within each time bar?
• Are bill of lading instructions consistent with what the owner and master have agreed?
• Have governing law, arbitration and service details been completed rather than left as options?

A checklist helps locate issues. It cannot decide whether the resulting wording protects a party in a specific dispute. Use the final charter and transaction-specific advice for that purpose.

BIMCO's contractual affairs resources provide publisher information on standard contracts and standalone clauses. Use the current licensed form when reviewing wording. This guide intentionally summarises functions and does not reproduce proprietary clauses.

Common questions

What is a charter party agreement?

A charter party is the contract by which a shipowner provides a vessel, vessel capacity or vessel services to a charterer on agreed terms. The contract may comprise a fixture recap, a named standard form, completed boxes and rider clauses. All of those layers need to be read together.

Do rider clauses take precedence over the printed form?

Often, but the contract should say how inconsistencies are resolved. A specifically negotiated rider or recap term commonly displaces inconsistent printed wording, while an untouched printed clause continues to operate. Never assume that every rider automatically overrides every other document.

Is a fixture recap binding before the charter party is signed?

It can be once the parties have agreed the terms and lifted the stated subjects, even if a longer document is prepared later. The result depends on the recap, the outstanding subjects, the parties’ communications and the governing law. Treat the recap as contract-critical from the first firm exchange.

How does a bill of lading relate to the charter party?

The charter party governs the owner and charterer relationship. A bill of lading records receipt and carriage terms for the cargo and may pass to a third-party holder. The documents can interact through incorporation wording and indemnity provisions, but they do not automatically bind the same parties on identical terms.

What charter party clauses should be read first?

Start with the recap, completed boxes and rider clauses, then confirm the precedence wording and read the printed form where it remains operative. Prioritise payment, vessel and cargo description, laycan or delivery, laytime or off-hire, performance, trading limits, sanctions and war risk, time bars, notices, law and arbitration.

Read next

Charter party types and standard formsHow a vessel time charter worksLaytime, demurrage and claimsHow a fixture reaches recap

This guide describes general market practice and is not legal advice. The signed contract, charter party and transaction-specific advice take precedence.