Contract of Affreightment

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Contract of Affreightment


in international commercial navigation, a contract by which maritime cargoes are transported.

The contract of affreightment may include one or both of two documents: a charter party and a bill of lading. It places an entire ship, part of a ship, or a specified place on a ship at the disposal of the shipper. Standardized forms, such as the Jenkon or Soviet-wood charters, are used for different types of cargoes and routes; the signatory parties may introduce qualifications and additions by mutual consent. A charter party must name the parties to the contract and specify the freight charge, the vessel and its cargo, the port of loading, and the port of destination or the ship’s route. A widely used charter party is the voyage charter, by which a ship is chartered for one or more voyages.

The charter party governs the relation between the shipper and the carrier and is signed by them or their agents. The charter party is often accompanied by a bill of lading, which must contain a clause stating that it has been issued on the basis of the charter party and that the conditions stated in the charter party hold good for tne bill of lading.

The demise charter is not considered a contract of affreightment but a type of property lease contract (seeLEASE OF PROPERTY). In a demise charter, by which a ship is hired for a definite period, the shipowner, for a consideration (rent), places the capacity of the ship at the disposal of the charterer (lessee) for the transport of cargoes or passengers or for other purposes, such as towing or fishing. Standardization forms are used for the demise charter, as in contracts of affreightment.

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The contract administration staff also have responsibilities in relation to the contract of affreightment, the contract of insurance and financial guarantees connected with a contract.
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