Time charterparties govern the use of vessels within specific timeframes, with hire payments being a pivotal aspect. This guide sheds light on the concept of hire, the off-hire clause, and issues surrounding off-hire events, providing valuable insights for owners and charterers.The shipownersclub source.
- Compensation for vessel availability in time charterparties.
- Temporary hire suspension due to specific event-defined vessel impairment.
- Distinguishing period and net loss clauses for accurate time assessment.
Compensation for Vessel Availability
Hire is the compensation paid to vessel owners for providing their vessel to charterers. It’s expressed as a per-day rate and is a key element in time charterparties.
Suspension of Hire Payments
Off-hire refers to the temporary suspension of hire payments due to circumstances preventing the vessel from fulfilling its required services. While off-hire is a contractual concept, it’s usually triggered by specific events outlined in the off-hire clause, such as breakdowns, damages, or detention due to accidents.
Factors and Interpretation
Determining an off-hire event involves assessing whether the vessel’s full working or efficient operation is impaired due to specific causes. The clause typically lists closed events, and the scope may be expanded by phrases like “any other cause.” It’s crucial to differentiate off-hire events from charter breaches and fortuitous occurrences.
Period and Net Loss Clauses
Off-hire clauses come in two forms: period clauses and net loss of time clauses. Period clauses calculate off-hire duration directly, regardless of actual time lost. Net loss of time clauses involve calculating actual voyage time lost due to the off-hire event. The choice of clause impacts the financial implications for both owners and charterers.
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Source-shipownersclub
