Bare Boat Charter or Charter by Demise under International Business


Bare Boat Charter or Charter by Demise under International Business

Bare Boat Charter or Charter by Demise under International BusinessUnder this agreement, the bare boat is let out by the ship owner to the charterer for a fixed period. The ship owner hands over the boat in a seaworthy condition to the charterer. The ship is at the disposal of the charterer during the period. It is the responsibility of the charterer to bear all running expenses like paying salary to crew and maintaining the necessary provisions and stores, in addition to bearing all the operating expenses, as mentioned above in the charter voyage. The charterer has the right to appoint the master of the crew and the Chief Engineer, subject to the approval of the owners.

The difference between the time charter and bare boat charter lies in the fact that in the latter case the ship lies in the bare form with the charterer who has the full right to operate the ship, in the way he desires. The ship owners have the minimum responsibility and are considered as 'dead' as they have no concern about the expenses and the use of the ship. Under this type of chartering arrangement, which is frequently also termed 'chartering by demise,' the ship owner virtually relinquishes all responsibilities and rights in respect of his vessel for a specified period, in return for a pre-arranzed and regular payment of hire. The charterer becomes an assumed owner, operating, crewing and chartering the ship as if he were, in fact, the owner. They have to return the ship in the same seaworthy condition as they have received, except normal wear and tear,

For the agreed period, the ship owners are paid a fixed sum per ton, calculated on dead weight of the ship. The charterer is totally free to use the ship for carrying the cargo during the specified period and has to bear all running and operational expenses.

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