Charter Party Agreements under the Maritime Code
The charter party — a ship hire contract — is the central document of commercial maritime law, and the Maritime Code of Georgia regulates its whole family in one chapter: the general requisites (Article 115), the definition and written form of the time charter (Articles 184 and 185), and the bareboat charter — transfer of the ship without crew, with a purchase option and detailed requisites (Articles 196 and 198). This page explains all three forms of charter together — what the contract must contain and what is left to the parties’ agreement.
The Charter’s Requisites — Article 115
A charter must indicate, as basic requisites: the names of the parties; the name of the ship; the name of the cargo; the ports of loading and destination — the direction of the ship’s movement; the cost of carriage — freight; and the parties’ basic obligations and the conditions of carriage. This enumeration is a minimum frame: on the basis of the parties’ agreement other additional conditions may be introduced into the charter. The charter is signed by the shipowner and the charterer or their authorized representatives — the authority to sign is checked exactly here.
The Time Charter — Articles 184 and 185
Under a contract of hire of a ship for a definite period — a time charter — the shipowner undertakes, for a definite term and fee, to hire the ship out to the charterer for the carriage of cargo, the carriage of passengers or another purpose of commercial navigation. A time charter is concluded in writing — an oral agreement does not suffice here. The degree of freedom also matters: the subsequent rules of this chapter apply where the parties have not agreed otherwise — the Code’s rules are dispositive, and the contract freely modifies them if the parties so decide.
The Bareboat Charter — Articles 196 and 198
Under a contract of hire of a ship without crew — a bareboat charter — the ship’s owner undertakes to transfer the ship to the charterer without crew for navigation for a definite term. After the term expires the ship may be transferred into the charterer’s ownership where the contract provides a right of redemption of the ship, the charterer performed his contractual obligations and paid the last instalment of the freight — the bareboat charter thus also converts into a purchase mechanism. The contract may be concluded only in compliance with the procedure established by the Code.
A bareboat charter must indicate: the names of the parties; the purpose of the contract; the ship’s name; the year of the ship’s construction; the ship’s class; the deadweight and cargo capacity; the power of the engines; the speed and fuel consumption; the term of use of the ship, after which the right of ownership may be transferred to the charterer; the amount and terms of payment of the bareboat charter fee; the time and place of delivery of the ship; the charterer’s right to choose the crew; who bears the registration costs; and other necessary data. Unless the contract provides otherwise, the charterer may, within the limits of his authority, conclude a sub-bareboat charter with a third party — though this does not free him from liability under the contract with the shipowner.
A practical note on requisites: the charter’s minimal enumeration is written precisely so that every question left outside it passes to the parties’ agreement — and that freedom should be used deliberately. The method of freight settlement, the consequences of delay, the moment of inspecting the ship’s condition and the procedure for resolving disputed situations are the conditions the Code invites the parties to write themselves — and precisely they become the subject of the dispute when the contract does not mention them.
Frequently Asked Questions
Below we answer the questions most frequently raised about charter party agreements.
What is the difference between a time and a bareboat charter?
Under a time charter the ship is hired for a term and fee for cargo, passengers or another purpose; under a bareboat charter the ship is transferred without crew for navigation, the crew being chosen by the charterer.
Can a ship be acquired through a bareboat charter?
Yes — with a redemption right, performance of obligations and payment of the last freight instalment, the ship passes into the charterer’s ownership.
Is a written form required?
For a time charter — yes, it is concluded in writing; a charter in general is signed by the shipowner and charterer or their authorized representatives.
May I re-hire the ship to another?
Under a bareboat charter — yes, as a sub-bareboat charter, unless the contract provides otherwise; this does not release from liability to the shipowner.
Which three conditions are needed for redemption?
A redemption right provided in the contract, performance of the charterer’s contractual obligations, and payment of the last instalment of the freight — all three together.
How We Help on Legal.ge
The terms of a charter party decide freight, deadlines and liability. The specialists at Legal.ge will explain Articles 115, 184, 185, 196 and 198 of the Maritime Code, assess the draft charter, and help in negotiation or dispute. Contact us through the Legal.ge form.