Other attributes
Bare Boat Charter. Main information
Bare Boat Charter is contract of chartering a ship without a crew and not equipped for cargo carriage or for other merchant purposes for a certain period and for a fixed fee(hire).
The main duties of the charterer are to accept the vessel and pay the hire. Also, the charterer must at his own expense complete the crew, food, navigation, operation, supply, bunkering and repair of the vessel during the time-period of the Charter.
Demise charter
Demise charter is a contract for the lease of a vessel for a fixed period, by virtue of which the lessee receives full ownership and control of the vessel, including the right to appoint the captain and crew of the vessel, for the term of the lease.
Bare Boat Charter with condition of further purchase
Shipowner cannot withdraw the ship from the charterer in case of delay of hire more that fourteen calendar days, if such delay is caused by circumstances independent of the charterer.
Shipowner can recover losses, caused by this delay. The shipowner loses this right if:
a) the Bare Boat Charter or subsequent additional agreement of the parties provides for the transfer of the vessel to the charterer’s ownership;
b) the delay is caused by circumstances beyond the charterer’s control.
Main differences between a Bare Boat and Time Charter and their coincidences
1) Bare Boat Charter it must include technical and operational data;
2) Under Bare Boat Charter, the charterer is responsible for maintaining seaworthiness of the vessel, unlike a Time Charter, where such a duty is borne by the ship owner;
3) Time Charter remuneration due to the ship for salvage services rendered before the end of the time Charter is distributed in equal shares between the ship owner and the charterer, less the cost of salvage and the share of remuneration due to the ship’s crew;
4) Under the Bare Boat Charter agreement, all salvage fees and towing fees are paid to the charterers, and payment for repairs to damage caused during these operations is charged to the charterers;
5) The charterer is exempt from paying the hire and expenses on the vessel for the time during which the vessel was unfit for operation due to unseaworthiness, unless the unsuitability of the vessel occurred through the fault of the charterer.
Pro Forms of Bare Boat Charter
Main Pro Forms of Bare Boat Charter:
a) Barecon 89
b) Barecon 2001
c) Bargehire 94
d) Bargehire 2008
(Bargehire is a bareboat charter party specifically designed for unmanned, non-self-propelled seagoing barges)
Limits of cargo transportation
The vessel must be used on legitimate voyages for the carriage of suitable legitimate cargo. Charterers undertake not to use the vessel or allow the vessel to be used other than in accordance with the terms of the insurance documents.
Survey
Ship owners and charterers appoint their surveyors to determine and agree in writing on the condition of the vessel at the time of delivery and return of the vessel.
Inspection
Ship owners have the right at any time to inspect or survey the vessel or to instruct an authorized surveyor to perform such an inspection on their behalf in order to establish the condition of the vessel and to make sure that the vessel is repaired and properly maintained.
Inventory and accounting of consumables and fuel
A complete inventory of all ship’s equipment, supplies, devices and all consumables available on Board is carried out by the charterers in conjunction with the ship owners, both when entering the vessel for lease and when with drawing the vessel.
Maintenance and operation; Responsibilities of the charterer for the repair and maintenance of mechanisms
1) Charterers are required to maintain the vessel and machinery in working condition, capable of performing their functions during the contract;
2) Charterers must take immediate measures to make the necessary repairs within a reasonable time;
3) Charterers are required to make and maintain a financial security in respect of damage caused by oil or other substances to the sea at the request of any government;
4) Charterers shall not make any structural changes to the vessel or alter the machinery or other aids without permission of shipowner;
5) Charterers have the right to install additional equipment at their own expense and risk, but they are required to remove such equipment at the end of the lease term if the ship owners require it.
Hire
a) The Charterers shall pay to the ship owners pay the agreed fixed amount (lump sum) for using the vessel for a calendar month, starting from the date and hour of delivery;
b) Payment of hire, excluding the first and last payment months, shall be made each month in advance on the first day of each month.
Commercial risks in Bare boat charters
The charterer is authorized to dispose the vessel during the Charter period at his own discretion as a bareboat owner. He assumes all responsibility and costs for the joint venture. In addition, it has the right to change the ship’s flag, apply his own brand names, as well as conclude contracts on his behalf for chartering a vessel without a crew with third parties for the entire duration of the bareboat Charter.
