Q6. Define and explain the following:
1. Contract of Affreightment
2. Charter Party
3. Bill of Lading
4. Mate’s Receipt
Ans. 1. CONTRACT OF AFFREIGHTMENT
A contract of carriage goods by sea is called contract of affreightment and it can be defined s follows:
When a ship-owner agrees carry goods by water to furnish a ship for the purpose of so carrying goods in return for a sum of money t e paid to him. Such a contract is called a contract of affreightment and the sum to be paid is called party or by a bill of lading.
2. CHARTER PARTY
A charter party is a contract between the ship owner and the shipper (owner of the goods) by which the ship owner agrees to carry for hire the full cargo of the shipper to furnish him the whole ship for the carriage of goods. The formal document on which this contract is made is called the charter party.
CONTENTS OF A CHARTER PARTY
A charter party usually contains the following terms.
NAMES OF PARTIES
Names address and other particular of the ship owner and the shippers.
INFORMATION ABOUT GOODS
All types of necessary information about the goods, which are to be carried.
INFORMATION ABOUT SHIP
All types of necessary information about the ship.
The amount of freight and the producer of its payment.
NAME OF PORTS
The name of all chose ports from where the goods will be loaded, unloaded and ship will pass during its voyage.
DUTIES OF THE MASTER
The nature of the duties of the master and crew of the ship towards the shipper.
CANCELLATION OF THE CONTRACT
Conditions for the cancellation of the contract of charter party and penalties imposed on the parties.
KINDS OF CHARTER PARTY
The following are the two kinds of a charter party.
(a) TIME CHA RTER
If the ship is hired for a specific period of time, it is called time charter. In this case freight is payable on the basis of time period for which ship is hired.
(b) VOYAGE CHARTER
If the ship is hired for a particular voyage, it is called voyage charter and here freight is payable on the basis of the distance covered by the ship.
3. BILL OF LADING
When under a general contract, the goods are delivers to the shipping company for carriage, the shipping company issues a document to the owners of the goods and it is called a bill of landing. It is an acknowledgment by the ship owner that they have received the goods for carriage and are responsible for the safe arrival of the goods to the destination of the consignee. It is not a contract but is an excellent evidence of the contract. The shipping company delivers the goods only to that consignee who has this document (bill of landing). So it is also a document of title to goods. It is prepared in sets. The first copy is sent to the consignee, the second is given to the consignor and the third copy is kept by the shipping company it self. It can also be negotiated by endorsement.
CONTENTS OF BILL OF LADING
A bill of lading usually contains the following information.
NAME OF PARTIES
This document contains the name of the consignor, consignee and also the name of the ship b which goods are carried.
INFORMATION ABOUT GOODS
All types of necessary information of goods like quality, quantity and packing etc. are also provided on these documents.
NAMES OF PORTS
The names of ports where goods are loaded, unloaded and ship will pass during its voyage are also given.
PURPOSE OF BILL OF LADING
A bill of lading serves the following purposes.
1. It is acknowledge of the receipt of the goods loaded on ship.
2. It is an excellent evidence of the contract of affreightment.
3. It is a document of title to goods.
4. By having this document, the consignee gets the delivery of the goods from the shipping company.
KINDS OF DILL OF LADING
A bill of lading is of these two kinds.
(a) CLEAN BILL OF LADING
When the goods are loaded on the ship, the master of the ship or any other person who is the incharge of the ship examines it. If he is satisfied with the packing of the goods, he signs the bill of lading without writing anything on it. So it is called clean bill of lading.
(b) FOUL BILL OF LADING
If the master of ship or any other in charge of the ship is not satisfied with the packing of the goods he states the position on the bill lading while signing on it. So it is called foul bill of lading.
4. MATE’S RECEIPT
When the goods are loaded on the ship, the Incharge of the ship issues a receipt to the owner of the goods and it is called Mate’s receipt”. It is a mere acknowledgment of the receipt of the goods. Later on it is exchange with the bill of lading.