CHARTERING AND BROKERAGE FINAL EXAM ACTUAL
QUESTIONS AND ANSWERS SURE A+
✔✔IFO & HFO cst - ✔✔IFO - 180 cst
HFO - 380 cst
✔✔Gross Load Free Out - ✔✔Owners pays for cargo loading, charterer pays for
discharge
✔✔COA vs Spot Voyage Charter - ✔✔- COA has a scheduling clause and is with many
ships
- Voyage charter has reguated laydays
✔✔Draft Survey vs. Outurn Survey - ✔✔- Draft survey is for the BoL tonnage and is
done at the load port
- Outurn survey is done at the discharge port, amount of cargo on board is calculated
before discharge
✔✔Statute of Frauds - ✔✔A state statute under which certain types of contracts must
be in writing to be enforceable.
✔✔"Charter party" comes from - ✔✔Carta Partita - divided document
✔✔Fully Fixed - ✔✔Once all subjects have been lifted with the required time frames,
parties are fully fixed. Broker will send out a final recap and prepare the charter party.
✔✔Ballast Bonus - ✔✔Compensation for relatively long ballast voyage.
Cost of fuel + Time on the ship
✔✔Are commissions payable on ballast bonus? - ✔✔No, they must be discussed
✔✔Broker's Responsibilities to Principal - ✔✔- Act within authority of the principal
- Exercise due diligence and skill
- Communicate all relevant information
- Render a full accounting of funds handled upon request
✔✔Competitive/Correspondent Broker - ✔✔Do not serve the charterer or owner
✔✔Broker's Commission - ✔✔Voyage Charters - normally 1.25% of total (freight,
deadfreight, demmurage)
Time Charters - normally 1.25% of the periodic time charter hire payments
✔✔Deadfreight - ✔✔Charterer pays the owner for failing to utilize the full capacity of the
cargo space that was reserved
, ✔✔Expressed vs Implied Contracts - ✔✔Expressed -parties overtly and expressly
manifest their intent to enter into an agreement
Implied in Fact Contracts
-contract inferred by the behavior/actions of the parties
Implied in Law contract (Quasi Contract)
-allows a court to treat the parties who don't have a contract as if they do
-more of an exception than a rule
-where 1 party receives a benefit at the expense of another party
✔✔Uniform Commercial Code - ✔✔the body of laws governing commercial transactions
in the US. Subject full and complete agreement on all charter party details
✔✔Failure to "lift" subjects in a timely fashion will cause the fixture to - ✔✔"Fail on
subjects"
✔✔Common subjects - ✔✔Subject open
Subject rescheduling
Subject management or board approval
Subject charter party details
✔✔Accept Except - ✔✔term used by brokers to note that an offer is accepted apart from
certain clauses or conditions
✔✔Firm offer - ✔✔Negotiations begin, if accepted forms a contract, usually specified a
reply time
✔✔Indication or "firm indication" - ✔✔Meaningless, negotiations begin after first offer
✔✔Worldscale - ✔✔- Freight rate system used in tanker trades.
- Allows you to trade on a voyage charter basis even if you do not know where you are
going
- Freight/Voyage rates for any combination of ports possible, is always updating
✔✔Is statute of frauds state or federal law? - ✔✔State
✔✔Article 3 Section 2 - ✔✔Contracts do not have to be in writing to be enforceable
✔✔Sale & Purchase Contract - ✔✔Must be in writing to be enforceable
✔✔Norwegian Sales Form - ✔✔Used for the sale of used ships, negotiations start when
someone makes a firm offer
QUESTIONS AND ANSWERS SURE A+
✔✔IFO & HFO cst - ✔✔IFO - 180 cst
HFO - 380 cst
✔✔Gross Load Free Out - ✔✔Owners pays for cargo loading, charterer pays for
discharge
✔✔COA vs Spot Voyage Charter - ✔✔- COA has a scheduling clause and is with many
ships
- Voyage charter has reguated laydays
✔✔Draft Survey vs. Outurn Survey - ✔✔- Draft survey is for the BoL tonnage and is
done at the load port
- Outurn survey is done at the discharge port, amount of cargo on board is calculated
before discharge
✔✔Statute of Frauds - ✔✔A state statute under which certain types of contracts must
be in writing to be enforceable.
✔✔"Charter party" comes from - ✔✔Carta Partita - divided document
✔✔Fully Fixed - ✔✔Once all subjects have been lifted with the required time frames,
parties are fully fixed. Broker will send out a final recap and prepare the charter party.
✔✔Ballast Bonus - ✔✔Compensation for relatively long ballast voyage.
Cost of fuel + Time on the ship
✔✔Are commissions payable on ballast bonus? - ✔✔No, they must be discussed
✔✔Broker's Responsibilities to Principal - ✔✔- Act within authority of the principal
- Exercise due diligence and skill
- Communicate all relevant information
- Render a full accounting of funds handled upon request
✔✔Competitive/Correspondent Broker - ✔✔Do not serve the charterer or owner
✔✔Broker's Commission - ✔✔Voyage Charters - normally 1.25% of total (freight,
deadfreight, demmurage)
Time Charters - normally 1.25% of the periodic time charter hire payments
✔✔Deadfreight - ✔✔Charterer pays the owner for failing to utilize the full capacity of the
cargo space that was reserved
, ✔✔Expressed vs Implied Contracts - ✔✔Expressed -parties overtly and expressly
manifest their intent to enter into an agreement
Implied in Fact Contracts
-contract inferred by the behavior/actions of the parties
Implied in Law contract (Quasi Contract)
-allows a court to treat the parties who don't have a contract as if they do
-more of an exception than a rule
-where 1 party receives a benefit at the expense of another party
✔✔Uniform Commercial Code - ✔✔the body of laws governing commercial transactions
in the US. Subject full and complete agreement on all charter party details
✔✔Failure to "lift" subjects in a timely fashion will cause the fixture to - ✔✔"Fail on
subjects"
✔✔Common subjects - ✔✔Subject open
Subject rescheduling
Subject management or board approval
Subject charter party details
✔✔Accept Except - ✔✔term used by brokers to note that an offer is accepted apart from
certain clauses or conditions
✔✔Firm offer - ✔✔Negotiations begin, if accepted forms a contract, usually specified a
reply time
✔✔Indication or "firm indication" - ✔✔Meaningless, negotiations begin after first offer
✔✔Worldscale - ✔✔- Freight rate system used in tanker trades.
- Allows you to trade on a voyage charter basis even if you do not know where you are
going
- Freight/Voyage rates for any combination of ports possible, is always updating
✔✔Is statute of frauds state or federal law? - ✔✔State
✔✔Article 3 Section 2 - ✔✔Contracts do not have to be in writing to be enforceable
✔✔Sale & Purchase Contract - ✔✔Must be in writing to be enforceable
✔✔Norwegian Sales Form - ✔✔Used for the sale of used ships, negotiations start when
someone makes a firm offer
