Charter Party Explained: GENCON, NYPE and Other Forms
The charter party is the contract between the charterer and the ship operator. It decides who pays what, when, and what happens when something goes wrong.
What a charter party is
A charter party is the written contract for the hire of a ship. It names the parties, the ship, the cargo or the period, the ports, the freight or the hire, and the rules for time, costs and responsibility. It is usually built on a standard form, with extra clauses added by the parties. This guide is general information, not legal advice. Always have a maritime lawyer review a contract before you sign.
Voyage charter forms
GENCON is the best known voyage charter form for dry cargo. It is short, so parties add their own clauses. Other forms are built for specific trades, for example forms for grain, coal, fertilizers or sugar. For tankers, Asbatankvoy is a common voyage form. In a voyage charter the ship operator controls the ship and the charterer pays the freight; see voyage charter.
Time charter forms
NYPE (New York Produce Exchange form) is the common time charter form for dry cargo ships; several versions exist, including NYPE 93 and NYPE 2015. Baltime is an older form. For tankers, Shelltime is common. In a time charter the charterer decides where the ship goes and pays hire per day, plus fuel and port costs. See time charter.
The main clauses
Laytime and demurrage: the time allowed for loading and discharging and the payment for extra time (laytime, demurrage and despatch). Notice of readiness: the message that starts the laytime (NOR). Freight and payment: when and how the freight is paid. Cargo claims and liens: who pays for damage and what rights the ship operator has to hold the cargo. Law and arbitration: which law applies and where disputes are decided. Safe port and safe berth: who is responsible for the safety of the loading and discharging places.
Rider clauses
The standard form is rarely used alone. Parties add "rider clauses" to cover the specific cargo and trade: cleaning of the holds, fumigation, sanctions, war risks, bunker clauses and others. Read all of them with care, because they can change what the standard form says.
Before you sign
Check that the ship, the cargo, the dates and the ports in the contract match the agreed recap. Check the laytime and demurrage terms, the payment terms and the law and arbitration clause. Keep the fixture recap and the signed contract together. A maritime lawyer or a broker can help to review the terms. See the guide how to charter a ship for the whole process.
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