Time Charter in Shipping is usually restored to when the charterer desires to operate a vessel for a period of time without undertaking either the financial commitments of ownership or responsibilities of navigation and management of the vessel.
Point of difference between time charter and voyage charter is the basis of calculating hire or freight . In the case of voyage charter freight is paid on the cargo carried and is directly proportionate to the volume of the cargo. In the case of time charter, the volume of cargo has no relation to the charter hire which is fixed on the basis of carrying capacity of the vessel and is directly proportionate to the period of charter .
Followings are the clauses contained in the time charter party usually related to :-
----- Description of the vessel name, flag, ownership, class, gross and net registered tonnage, cargo capacity, indicated horse power and speed, bunker consumption, etc.
----- Rate of cahrter hire and mode of payment.
----- Charter period and redelivery of the vessel.
----- The charterer's right to direct the vessel in regard to the voyage it shall perform and the cargo it shall carry.
----- Allocation of operating cost - The owner has to pay running expenses like wages, provisions, insurance, stores etc. and charterer has to pay other expenses like bunker and waters, port charge , canal passing charge etc.
----- Owner's indemnity against liability incurred under bill of lading.
----- Liability for damage to the vessel - while the owner is responsible for maintaining the vessel in an efficient state during the currency of the charter and has therefore to assume responsibility for any damage sustained in connection with navigation, the charterer is to be responsible for any loss or damage caused to the vessel or owners by improper loading or unloading of goods or any negligent act on the part of the charterer or his servant.
----- Off-hire or suspension of hire during period of inefficiency of the vessel.