Charter-party (charta partita)—as being originally written in duplicate on one parchment, which was then divided by a straight line, so that the parts should tally) is the common written form in which the contract of affreightment is expressed—viz. the hiring of the whole or part of a ship for the conveyance of goods. The case of carriage of passengers at sea is under different regulations. The carriage of goods is often left to rest on bills of lading, or even mere oral arrangement, but a charter-party with a sixpenny stamp is the proper and safe arrangement. It is executed by the owner or his accredited agent; abroad, the master has authority to sign. It identifies the ship by name, by tonnage measurement, and by place. The obligations of parties are generally expressed with fullness. The chief of these are that the ship is seaworthy, and is furnished with necessary tackle, and with a fit master and crew. Unseaworthiness may be caused by the manner of stowage. The master's knowledge of the particular ports and perils on the voyage is included in his fitness. The ship is also bound to have the proper papers and clearances. The ship must be ready to receive cargo at the time specified; and in general, delay on the part of the ship would entitle the charterer to cancel the contract. The voyage must be performed according to the rules of good seamanship, necessity being required to justify any deviation from the route. The matter of compulsory pilotage depends upon the Merchant Shipping Acts. Due care is to be shown in loading and unloading, and the goods must be safely delivered at the port of discharge. On the other hand the freighter must have a lawful cargo ready at the time agreed upon; in this case also delay would generally entitle the shipowner to cancel the contract, or at least to claim damages for detention. The freight is sometimes a lump sum for the voyage: sometimes so much per ton or per week.
The execution of a charter-party does not supersede the granting of Bills of Lading (q.v.) or receipts for the cargo, which are not only useful in fixing the condition and quantity of the goods, but are the documents of title by which the ownership of cargo may be transferred during voyage. In the case of general ships, which are advertised for a certain voyage, the shipowner becomes a common carrier, bound to carry goods tendered subject to the conditions of the advertisement, but in this case no charter-party is executed. In coasting voyages mere receipts, not formal bills of lading, are often used. In settling freight at the port of discharge, the weight or measurement of cargo there is prima facie the criterion, but it may be shown that the weight, &c. has altered during voyage. Where an advance against or prepayment of freight is made, the law of Scotland is that this may be recovered, even though the voyage fail; in England, on the other hand, both shipper and consignee are liable for freight, and the master has a lien on cargo for freight. But it is common under a cesser clause for the charterer to stipulate that his personal liability for freight and demurrage shall cease when the loading is completed, so that in most cases the master looks to his lien for security. When the goods arrive damaged, the consignee is bound to take them, and settle the freight subject to a claim for damages; he cannot abandon the goods for the freight. If the freighter take the goods at an intermediate port, the ship being unable to proceed further, a proportion of freight is due; and this is also the case where some of the goods are lost, if enough was not lost to justify abandonment. Except on a time charter, the duration of a voyage, which may depend on closing of navigation by ice, &c., is entirely at the risk of the shipowner. Dead freight is paid for unoccupied space in the ship where a full cargo has been promised. Apart from stipulation, the shipowner is liable for the goods shipped in their original condition, except where that condition is altered by perils of the sea, hostile force, and inevitable accident. It is now common, however, by indemnity clauses in charter-parties to protect the owner from liability for every damage that can be covered by insurance. By statute, owners are not liable for fire, or for the fault of a compulsory pilot; and in no case are they liable beyond a sum representing £15 per ton of the ship's measurement. It is always an important question whether the arrangements made about the ship place the charterer in the position of an owner, or whether the owner retains such a possession and control of the ship as to be able to exercise a lien for freight, and on the other hand to incur liability for repairs and supplies, and for damages caused by negligence of the master or crew.
In the United States, the law relating to charter-parties is the same as that which has just been explained. When the charterer has complete control over the voyage, he is generally considered the owner for the voyage. But if the charter-party lets only the use of the vessel, the owner retaining possession and control over its navigation, the charterer is regarded as merely a contractor for a particular service, and the rights and duties of the owner are unchanged. The usual printed parts of a charter-party are construed like covenants in a deed, but charter-parties are often informal instruments, and are therefore construed as liberally as other mercantile contracts, preserving the intention of the parties. The courts incline to construe a charter-party as a contract for affreightment, charging the shipowners as carriers.