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Maritime Commerce
CHARTER PARTIES
Charter Party is a contract by which an entire ship, or some principal part thereof, is let/leased by the
owner to another person for a specified time or use.
- is a contract by virtue of which the owner or agent binds himself to transport merchandise or
persons for a fixed price.
Two Kinds of Charter-Parties
1. Bareboat Charter - The charterer provides crew, food and fuel. The charterer is liable as if he were
the owner, except when the cause arises from the unworthiness of the vessel. The shipowner leases to
the charterer the whole vessel, transferring to the latter the entire command, possession and consequent
control over the vessels navigation, including the master and crew, who thereby become the charters
servants. It transforms a common carrier into a private carrier.
The charterer becomes the owner of the vessel pro hac vice, just for that one particular purpose only.
Because the charterer is treated as owner pro hac vice, the charterer assumes the customary rights and
liabilities of the shipowner to third persons and is held liable for the expense of the voyage and the wages
of the seamen.
2. Contract of Affreightment - A contract whereby the owner of the vessel leases or all of its space to
haul goods for others.
The ship owner retains the possession, command and navigation of the ship, the charterer merely
having use of the space in the vessel in return for his payment of the charter hired.
This is subdivided into Time Charter and Voyage Charter.

Classes of Charter Party

1. As to extent of vessel hire
a. total
b. partial the charterer does not as a rule acquire the right to fix the date when the vessel should
depart, unless such right is expressly granted in the contract

2. as to time
a. until a fixed day or for a determined number of days or month
b. for a voyage

3. as to freightage
a. for fixed amount of for the whole cargo
b. for a fixed rate per ton
c. for so much per month

Effect of charter on character of carrier: Generally, the character of the common carrier as such
is not affected by the charter partyif the same is a contract of affreightment.
Persons who may make a charter:
1. Owner or owners of the vessel, either in whole or in majority part, who have legal control and
possession of the vessel
2. Charterer may subcharter entire vessel to 3
rd
person only if not prohibited in original charter.
(Art.678)
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3. Ship agent if authorized by the owner/s or given such power in the certificate of appointment.
(Art.598)
4. Captain in the absence of the agent or consignee and only if he acts in accordance with the
instructions of the agent or owner and protects the latters interests. (Art.609)
Requisites of a valid charter party:
1. Consent of the contracting parties
2. Existing vessel which should be placed at the disposition of the shipper
3. Freight
4. Compliance with Art. 652 of the Code of Commerce which include the requirement that the
charter parter must be (1) in writing, (2) drawn in duplicate and (3) signed by the parties
Obligations of Shipowner
1. Art. 669 to observe in the charter parties, the capacity of the vessel, and to indemnify the
shippers whose contracts are not fulfilled for the losses they may have suffered by the failure of
the shipowner to observe the capacity of the vessel
2. Art. 670 to undertake a voyage at the time agreed upon or within 15 days from loading if no time
is stipulated, even if the shipowner should not find cargo sufficient to make up at least 3/5 of the
amount which the vessel may hold, where he fails to exercise his right to change vessel
3. Art. 670 where the shipowner should not find cargo sufficient to make up at least 3/5 of the
amount which the vessel may hold, to accept other cargo procured by the owner of the freight
already loaded under the same price and conditions
4. Art. 671 not to change the vessel after 3/5 of the vessel has been loaded, where the consent of
the charterers or shippers
5. Art. 672 if the vessel has been chartered in whole, not to accept cargo from any other person
without the consent of the charterer
6. Art. 673 to answer for losses arising from delay in putting to sea
7. Art. 673 to have the vessel in a condition to navigate at the time of receiving the cargo
8. Art. 677 in case of declaration of war or blockade during the voyage, where the captain has not
received any instructions from the charterer, for the captain to proceed to the nearest safe and
neutral port, requesting and awaiting orders from the shippers
Rights of Shipowner
1. Art. 670 - where the cargo is not sufficient to make up at least 3/5 of the amount which the vessel
may hold, he may substitute another vessel inspected and declared suitable for the voyage - - -
expenses of transfer and increase in price of the charter shall be paid by him
2. Art. 674 to collect the freight in accordance with the price stipulated for cargo in excess of that
agreed upon is such excess can be properly stowed
3. Art. 674 to refuse and unload at the expense of the owner excess cargo that cannot be properly
stowed
4. Art. 674 to unload merchandise clandestinely placed on board, or to transport them if he can do
it so, demanding the highest freightage
5. Art. 675 to find freight to take place of freight not received, if the vessel has been chartered to
receive cargo in another port, after he receives no cargo from the consignee and after he receives
no answer from the charterer
6. Art. 675 to receive freight in full, discounting that which may have been earned on the
merchandise carried as a substitute
7. Art. 677 to have the charter party subsist notwithstanding the declaration of war or a blockade
during the voyage, and to receive in such cases, the freightage in full where the shipper orders that
the cargo should be discharged at the port of arrival
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Obligations of the Charterer
1. Art. 680 to pay the freight in full even if the charterer does not complete the full cargo he bound
himself to ship
2. Art. 681 to answer with the value of his shipment and other property for the losses
3. suffered by the shipowner, captain or other shippers arising from the confication, embargo,
detention, or other causes, where the charterer loads goods different from those stated at the time
of the execution of the charter party.
4. Art. 682 to be jointly liable with the captain for losses which may be caused to the other shippers
where the charterer ships goods for illicit commerce with the knowledge of the shipowner or
captain
5. Art. 682 in case of making a port to repair the hull, machinery or equipment of the vessel, to
wait until the vessel is repaired or to pay for the expenses of unloading should the charterer chose
to load
6. Art. 684.- where the charterer unloads good before arriving a port of destination without any
force majeure occurring, to pay (1) of arrival, (2) full freight and (3) for the damages and losses
caused to other shippers, if any
7. Art. 685 - where the charterer unloads before the beginning of the voyage (1) to pay of the
freight, (2) to pay for the expenses of stowing and and restowing the cargo, (3) to pay any other
damage which he may have caused other shippers
8. Art. 686 - to pay for freight, other expenses and the primage after the vessel has been unloaded
and the cargo placed at the disposal of the consignee
9. Art. 687 - not to abandon merchandise damaged on account of inherent defect or fortuitous event,
for the payment of the freight and other expenses
COLLISIONS
Collision is the impact of two vessels both of which are moving
Allision is the striking of moving vessel against one that is stationary
Cases of Collision:
1. due to fault, negligence or lack of skill of the captain, sailing mate or the complement of the vessel -
- - under Art. 826, the shipowner shall be liable for the losses and damages
2. due to the fault of both vessels - - - under Art. 827, each vessel shall suffer its own losses, but as
regards to the owners of the cargoes, both vessels shall be jointly and severally liable
3. where it cannot be determined which of the two vessels is at fault - - - under
Art. 828, each vessel shall suffer its own losses, and both shall also be solidarily responsible for
the losses and damages caused to their cargoes
4. collision due to fortuitous event or force majeure - - - under Art. 830, each vessel shall bear its
damages
5. where two vessels collide with each other without their fault but by reason of the fault of a third
vessel - - - under Art. 831, the owner of the third vessel causing the collision shall be liable for the
losses and damages
6. a vessel which is properly anchored and moored may collide with those nearby by reason of a
storm or other cause of force majeure - - - under Art. 832, the vessel run into shall suffer its own
damages and expenses



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SHIPWRECKS
A ship which has received injuries rendering her incapable of navigation

The loss of a vessel at sea, either by being swallowed up by the waves, by running against another
vessel or thing at sea, or on the coast.
Under Art. 841, in case the wreck or stranding is due to the (1) malice, negligence, or lack of skill of the
captain, (2) or because the vessel put to sea was in sufficiently repaired and equipped, the captain shall
be liable.
Where a ship and its cargo are saved together , the salvage allowance should be charged against the
ship and the cargo in proportion of their respective values, the same as in general averages and neither is
liable for the salvage due from the other.
Where a personal action is brought by the salvor against the owner of the ship, the liability of the
latter is limited to such part of the salvage compensation due for the entire service as is proportionate to
the value of the ship.