In the dry cargo markets, most shipping contracts are for the carriage of bulk raw materials. Traditional contract of carriage for the movement of such bulk raw materials is the charter-party. Charter-party is derived from Latin carta partita (split paper) i.e. a document written in duplicate so that each party retains half of the document. In many shipping-law books, instead of phrase ‘contract of carriage’ (charter-party), CoA (contract of affreightment) is used. CoA (contract of affreightment) expression is just one degree more correct a way of describing the movement of goods by sea. CoA (contract of affreightment) has, amongst the chartering fraternity, taken on a meaning describing a specific type of contract.
In chartering market, ship chartering contract is probably one of the clearest examples of a transaction entirely governed by shipping market forces. Chartering contract is invariably negotiated in a free market, subject only to the laws of supply and demand. Relative bargaining strengths of the two parties (charterers and shipowners) will depend on the current state of the shipping market. Shipowner and the charterer are able to negotiate terms entirely free from any statutory interference. Practically, chartering contract parties (charterers and shipowners) almost certainly adopt a customary standard charter-party form of charter party which has been developed for the particular trade. In shipping practice, standard charter-party form is mostly updated with additions and deletions with added typed clauses (rider clauses). Depending upon the state of shipping market, hard bargaining between shipowners and charterers may take place amongst these charter-party amendments, as well as the freight/hire/demurrage rate.