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 charter-parties]

AFFREIGHTMENT

to these rules, which are founded upon the well-established customs of merchants recognized and formulated by the courts of law. (9) The bill of lading sometimes contains a clause as to the shipowner’s lien. Without any express provision for it the shipowner has by the common law a lien for freight. If it is desired to give the shipowner a lien for demurrage (see below), or other charges, it must be expressly provided for. The lien is the right of the shipowner to retain the goods carried until payment has been made of the freight or the demurrage, or other charge for which a lien has been given. The lien may be waived, and is lost by delivery of the goods, or by any dealing with the consignee which is inconsistent with a right of the shipowner to retain possession of the goods until payment has been made. The shipowner may preserve his lien by landing the goods and retaining them in his own warehouse, or by storing them in a public warehouse, subject to the conditions required by the Merchant Shipping Act, 1894. Cbarter-parties. Charter-parties are, as we have already explained, either for a voyage or for a period of time. (1) A charter-party for a voyage is a formal agreement made between the owner of the vessel and the charterers by which it is agreed that the vessel “being tight, staunch, and strong, and every way fitted for the voyage,” shall load at a certain named place a full cargo either of goods of a specified description or of general merchandise, and being so loaded shall proceed with all possible despatch either to a specified place or to a place to be named at a specified port of call, and there deliver the cargo to the charterers or their assigns. There are clauses which provide for the amount of freight to be paid and the manner and time of payment; for the time, usually described as lay days, to be allowed for loading and discharging, and for the demurrage to be paid if the vessel is detained beyond the lay days; usually also a clause requiring “ the cargo to be brought to and taken from alongside at merchant’s risk and expense ”; a clause that the master shall sign bills of lading for the cargo shipped either at the same rate of freight as is payable under the charter-party or very commonly at any rate of freight (but in this case with a stipulation that, if the total bill of lading freight is less than the total freight payable under the charter-party, the difference is to be paid by the charterers to the master before the sailing of the vessel) and there is usually what is called the cesser clause, by which the charterer’s liability under the charter-party is to cease on shipment of the cargo, the shipowner taking a lien on the cargo for freight, dead freight, and demurrage. The charter-party is made subject to exceptions similar to those which are found in bills of lading. There are also usually clauses providing for the commissions to be paid to the brokers on signing the charter-party, the “ address ” commission to be paid to the agents for the vessel at the port of discharge, and other matters of detail. The clauses in charter-parties vary of course indefinitely, but the above is probably a sufficient outline of the ordinary form of a charter-party for a voyage. What has been said with regard to bills of lading as to the voyage, the place of delivery, the exceptions and excepted perils, and the liability of the shipowner and his lien applies equally to charter-parties. It may be desirable to add a few words on demurrage, dead freight, and on the cesser clause. Demurrage is, properly speaking, a fixed sum per day or per hour agreed to be paid by the charterer for any time during which the vessel is detained in loading or discharging over and above the time allowed, which is, as we have said, usually described as the lay days. Sometimes the number of days during which the vessel may be kept on demurrage at the agreed rate is fixed by the charter-party. If no demurrage is provided for by the charterparty, and the vessel is kept loading or discharging beyond the lay days, the shipowner is entitled to claim damages in respect of the

113 loss which he has suffered by the detention of his ship ; or, if the vessel is detained beyond the fixed number of demurrage days, damages for detention will be recoverable. Sometimes there is no time fixed by the charter-party for loading or discharging. The obligation in such cases is to load or discharge with all despatch that is possible and reasonable in the circumstances ; and if the loading or discharging is not done with such reasonable despatch, the shipowner will be entitled to claim damages for the detention of his ship. The rate of demurrage (if any) will generally be accepted as the measure of the damages for detention, but is not necessarily the true measure. When the claim is for detention and not demurrage the actual loss is recoverable, which may be more or may be less than the agreed rate of demurrage. The contract usually provides that Sundays and holidays shall be excepted in counting the lay days, but unless expressly stipulated this exception does not apply to the computation of the period of detention after the lay days have expired. Dead freight is the name given to the amount of freight lost, and therefore recoverable by the shipowner from the charterer as damages if a full and complete cargo is not loaded in accordance with the terms of the charter-party. The cesser clause has come into common use because very frequently the charterers are not personally interested in the cargo shipped. They may be agents merely, or they may have chartered the vessel as a speculation to make a profit upon the bill of lading freight. The effect of the clause is that when the charterers have shipped a full cargo they have fulfilled all their obligations, the shipowner discharging them from all further liability and taking instead a lien on the cargo for payment of all freight, demurrage, or dead freight that may be payable to him. It has become an established rule for the construction of the cesser clause that, if the language used will permit it, the cesser of liability is assumed to be coextensive only with the lien given to the shipowner ; or, in other words, the charterers are released from those liabilities only for which a lien is given to the shipowner. The shipowner is further secured by the stipulation already referred to, that if the total freight payable under the bills of lading is less than the full chartered freight the difference shall be paid to the shipowner before the vessel sails. A difficulty which sometimes arises, notwithstanding these precautions, is that although an ample lien is given by the charter-party the terms of the bills of lading may be insufficient to preserve the same extensive lien as against the holder of the bills of lading. The shippers under the bills of lading, if they are not the charterers, are not liable for the chartered freight, but only for the bill of lading freight; and unless the bill of lading expressly reserves it, they are not subject to a lien for the chartered freight. The. master may guard against this difficulty by refusing to sign bills of lading which do not preserve the shipowner’s lien for his full chartered freight. But he is often put into a difficulty by a somewhat improvident clause in the charter-party requiring him to sign bills of lading as presented. (2) A time charter-party is a contract between the shipowner and charterers, by which the shipowner agrees to let and the charterers to hire the vessel for a specified term for employment, either generally in any lawful trade or upon voyages within certain limits. A place is usually named at which the vessel is to be redelivered to the owners at the end of the term, and the freight is payable until such redelivery ; the owner almost always pays the wages of the master and crew, and the charterers provide coals and pay port charges ; the freight is usually fixed at a certain rate per gross register ton per month, and made payable monthly in advance, and provision is made for suspension of hire in certain cases if the vessel is disabled ; the master, though he usually is and remains the servant of the owner, is required to obey the orders of the charterers as regards the employment of the vessel, they agreeing to indemnify the owners from all liability to which they may be exposed by the master signing bills of lading or otherwise complying with the orders of the charterers ; and the contract is made subject to exceptions similar to those in bills of lading and voyage charterparties. This is the general outline of the ordinary form of a time charter-party, but the forms and their clauses vary of course very much, according to the circumstances of each case. It is apparent that under a time charter-party the shipowner to a large extent parts with the control of his ship, which is employed within certain limits according to the S. I. — 15