The bulk of the goods in foreign trade is transported by sea. The exporter needs to hire a ship or a part of it to send certain goods to a specified place. For this purpose the exporter enters into an agreement with the owner of a ship or the charter. The document containing such agreement which is duly signed by the owner of a ship and the trader to send certain amount of goods to a specified person at a particular place is known as charter party. Simply it is a deed of contract between the owner of the ship and the merchant.

According to C. J. Woelfel, Charter party to a written agreement by which the owners of a vessel or their agent place it at the disposal of merchant, the charter for carriage of full cargo merchandise?.

?The agreement with the shipping company for hiring the ship is called charter party.?

-Yogendra Prasad Verma.

So, a charter is a contract between the charterer and the merchant.

The charter party usually contains the following classes-

1. Introduction of the shipping authority.

2. Introduction of the exporter.

3. Nature of rent.

4. Amount of rent.

5. Routs and time of shipment

6. Pre-request concerning product reservation.

7. Principles regarding compensation.

Charter party may be of two types, viz.-

a. Time charter

b. Voyage charter.

Time Charter:

When a ship or a portion of ship is hired or rented for a specific period of time then it is called time charter. In this type of charter the ownership and responsibility of the ship lies upon the rented party.

Voyage Charter:

When an agreement is done on the basis of a specific marine travel not for time then it will be called voyage charter. In this type of charter the responsibility lies upon the shipping authority.

Figure is given below of charter party.

1st Party 

Shipping Agreement

Date2nd party
X company ltd. Motijheel C/A, Dhaka X Shipping company ltd.Agrabad, Chittagong.
2nd Party agree to give time charter, from 1st January to 13th December to the 1st Party. 

Signature??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Witness

1st Party …………………………………………

2nd Party ………………………………………..

Fig: Shipping Agreement

Finally it can be said that, the agreement with the shipping company for hiring the ship or a portion of ship is called charter party.