Bare Boat Charter
Bare Boat Charter is also known as Demise Charter. This is a type of contract under which the owner provides the service of vessel to the Charterer for a period of time in return for charter hire. For all practical purpose, charterer acts as the owner of the vessel during the period of charter but without undertaking the financial commitments of ownership.
The Bare Boat Charter party commonly used is the standard "Barecon" charter party. The charter party usually contains clauses relating to;
1) Description of vessel - such as size, speed, fuel consumption, loading capacity etc. on which the performance will be depend.
2) Survey to be carried out on delivery and re-delivery.
3) Inventories of stores to be taken on delivery and re-delivery.
4) Charter period - usually a provision of included giving the charterer the option of extending the validity of the charter by a specified period.
5) Rate of charter hire and mode of payment. This is usually computed on the deadweight tonnage of the vessel per month and is payable every month in advance.
6) Maintenance and operation during period of charter - The vessel to be at the disposal and under the complete control of the charterer who will be responsible, for supply of crew officers, stores, provisions, bunkers etc. and for all other items of operational costs including insurance.
Sometimes, Bare Boat Charter serves as "hire/purchase" contract .
Under such a contract , the owner/seller retains formal ownership and thereby security in the vessel until the full purchase price is paid .