The shipping trade consists chiefly of the carriage of goods and passengers by sea. For each of these purposes the employment of a vessel may be agreed upon between the contracting parties in two different ways.
(a) Either the owner lets out his ship’s services to a person or a body of persons undertaking to carry goods or passengers for their account.
(b) Or, having announced her sailing, either direct for one port or for several in a fixed rotation, he agrees with single shippers or passengers to convey the former’s goods or the latter’s persons to certain places in the said rotation.
When employed in the latter form a vessel is technically called a general ship.
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Instruments used.-
There are two instruments used to embody the conditions relating to the employment of a vessel for the carriage of goods, viz.:
A charter party, which contains the contract between owner and merchant for the hire of the whole or part of the available space in the ship’s hold, for an agreed- upon time and purpose.
A bill of lading, whereby the owner acknowledges receipt of goods shipped on board his vessel, and engages with the shipper to convey them to the port named, under certain specified conditions, and for a fixed remuneration.
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As to the conveyance of passengers, which forms quite a special and limited branch of the trade, and is therefore, less interesting for the commercial community at large, we limit ourselves to the following statement, that ships are nowadays seldom hired for that purpose, as the trade is carried on directly, and for their own account, by steamship owners or navigation companies; but should the case happen, the affreightment must, of course, be effected likewise by a charter party. As co the contract for the passage of a single person, it is witnessed by a very simple document, called the passage ticket.
The bill of lading is the indispensable complement of the charter party, since it bears witness that the goods, for the carriage of which the vessel was hired, were really shipped onboard, thus giving effect to the provisions of the charter.
When the cargo is composed of goods belonging to different shippers unconnected with each other, no charter party is to be drawn up, as the ship’s services are hired as a whole by none of them.
The bill of lading has in such cases the force, and partakes of the nature, of the charter; since, although not drawn up in the regular form of a contract, it must be considered, in the absence of a regular charter, as the evidence of a parole contract, existing at the time of shipping between the shipper and the owner.
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It is obvious, in fact, that by engaging to convey the goods on board his vessel, the owner has let out, on certain conditions, the space required for their stowage in the ship’s hold.
The wording of both charter parties and bills of lading is not determined by law. Although the general and main features of such documents have long been established by practice, a perfect uniformity could never be obtained, notwithstanding the earnest endeavors of the ship-trading classes.
The sort of ship to be employed (whether a steamer or a sailing vessel), the kind of goods to be shipped, the voyage on which the vessel is to be bound, the custom of the principal ports in the various seas, besides other circumstances, give rise to different and variable conditions, which cannot be framed into a single form of contract of affreightment.
Many different descriptions of charters are therefore used, which go by the name of the sea or of the region where the ship is trading, as-Black Sea charters, Baltic charters, India charters, Mediterranean charters, etc.; or, again, they are distinguished by the name of the cargo, as-coal charters, grain charters, tea charters, timber charters, etc.
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As to bills of lading, the main difference in the wording depends, in the first place, on their being drawn up for goods shipped under a charter, or not.
In the former case the bill of lading is usually reduced to its simplest form, merely referring to the conditions of the charter, while, in the case of a general ship, any condition agreed upon between the parties is to be stated in the bill of lading; a circumstance which, for the same reasons explained above in the case of charter parties, gives rise to many different clauses, hence to different descriptions of bills of lading.
Both for charter parties and bills of lading there are suitable forms, approved and introduced from time to time by leading associations of merchants and ship-owners, or by navigation companies, and generally accepted by the trade.
Printed copies of such forms are issued, with blank spaces left to be filled up in writing, and a great deal of time is thus saved in drawing up the documents.
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As such forms are framed to meet general, not particular circumstances, it is often found that some one of the printed clauses do not apply to the case. All sorts of alterations are then made in the document, either by blotting out words or by making written or stamped additions, as required to express the terms agreed upon; which is so often the case that new clauses, it may be said, are daily invented and added, to meet the requirements of the different trades, or the conditions of the markets.
Written or stamped clauses have, therefore, by general consent, a greater effect than the printed wording, in case the latter has not been conveniently cancelled, as it should have been done on the adoption of a different condition.
Distinction in Charters.-
The principal distinction in charters concerns the term of their duration. A ship may be chartered, either for a certain determined voyage, or for a certain specified length of time. The former, which is the most common, gives rise to voyage charters, the latter to charters on time, or time charters.
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Charter Clauses.-
The most important clauses of a charter party, when the ship is hired for a voyage, are the parties to it, the ship, the voyage, the cargo, and the freight.
In the case, however, of a time charter, the clauses concerning the voyage and the cargo are superseded by one appointing the term during which the ship is to be at the charterer’s disposal.
Parties.-
A charter party begins by stating how the agreement has been legally entered into between the Parties to it, viz., between the owner and the charterer, whose names and qualifications must, therefore, be inserted after the usual wording:
It is this day mutually agreed between Messrs.
In the case of a vessel belonging to several co-owners the charter bears the name and qualifications of the part-owner appointed to act as managing owner or ship’s husband.
Either the captain, or another representative specially appointed by the owner, on one side, and the freighter’s agent on the other side, may respectively enter upon the agreement in behalf of their principals, when their names must appear on the face of the documents, with full notice of their capacity in the contract.
Clauses as to Ship.-
The description of the ship, her name, nationality, and burthen, her master’s name, and the name of the place whereat she is lying for the time being, must follow, together with the owner’s declaration of her being tight, staunch, strong, and every way fitted for the voyage.
Such declarations are called warranties, and imply the owner’s assurance that the ship is, in her structure, condition, and equipment, fully seaworthy, and fit for the voyage she is to undertake, and for the cargo she is to carry. He is liable, therefore, for any fault existing on her sailing.
The voyage and cargo clauses come next.