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Cargo Aircraft Charter Agreement – between Charterer and Broker acting as Agent of Carrier

(For sole use passenger aircraft charter – between Charterer and Broker as intermediary)

 

The Baltic Air Charter Association (“BACA”) has produced the attached specimen draft agreement as a guide to its members and others as to the often-used contractual terms involved in agreements that may cover the business they undertake. The attached specimen draft is produced for reference purposes and by way of example only and is not exhaustive or definitive, as all transactions are different. BACA gives no representation or warranty as to the efficacy or applicability of this draft or its contents and BACA shall have no liability to any person who may rely upon them. Any persons seeking to use this draft should take their own separate legal advice.

 

BALTIC AIR CHARTER ASSOCIATION

 

PASSENGER AIRCRAFT CHARTER AGREEMENT

 

BETWEEN:-

 

  1. [name of Broker and Address]

(“the Intermediary”)

 

and

 

  1. [name of Charterer and Address]

(“the Charterer”)

 

 

NOW IT IS HEREBY AGREED as follows:-

 

The Intermediary, shall cause the Carrier (as hereinafter defined), to make available to the Charterer the Aircraft as specified in the Schedule below and the Charterer shall take the Aircraft on charter from the Intermediary upon the terms and conditions set out in the Schedule below and subject to the terms and conditions set out in the General Conditions attached to and forming part of this Agreement.

 

THE SCHEDULE

 

Base Date:

 

Aircraft Type and Model:

 

Aircraft Registration:

 

The Carrier:

 

Flight Number(s):

 

Routing and Schedule (GMT):

Baggage Allowance:    Hold                kgs;                  Hand:              kgs  

 

Number of passengers:

 

Charter Price:    US Dollars [                  ]. [inclusion/exclusion of passenger taxes, APD etc., as applicable.]

 

The Charter Price excludes:

 

  1. Any war risk and allied perils insurance premium surcharge or any similar or other insurance premium surcharge required from time to time.
  2. De-icing charges including those incurred on any positioning, de-positioning or ferry leg.

 

Cancellation:   If the Charterer wishes to cancel any Flight or Flights the subject of this Agreement the following rates will be paid forthwith by the Charterer to the Intermediary as agreed compensation:

 

25% of the Charter Price if cancelled after contract exchange;

50% of the Charter Price if cancelled within 72 hours prior to STD;

75% of the Charter Price if cancelled 48 hours prior to STD;

100% of the Charter Price if cancelled within 12 hours of STD.

 

Demurrage/Standing Charge:

At the rate of US Dollars [               ] per day or part thereof, the time of which commences [   ] hours after STD should the delay be directly caused by the Charterer.

 

Non Payment:

If for any reason payment of the Charter Price or any instalment thereof shall not be made on the due date then the Charterer shall pay to the Intermediary interest on the amount unpaid at the rate of [  ] % per annum above the base rate for the time being of [name of bank] calculated on a daily basis from the due date until the date of payment (both before and after judgment), compounded monthly.

 

Payment Terms:

Payment of the Charter Price shall be made directly to the Intermediary by telegraphic transfer to:

[name of bank]

[address of bank]

[Account Name]

Account No:     [             ]

Sort Code:       [             ]

 

and received in cleared funds in such account, no later than [                           ].

 

Passengers to be ready for check-in not less than [    ] minutes before STD.

 

Special Conditions:

 

Flights can only be confirmed once written acceptance of the terms and conditions of this Agreement is received not later than 1200 GMT on [date], and that financial conditions can be met. Flights are also subject to all overflight and landing permits being in place, weather, slots and airport opening times.

 

The following special conditions shall apply when the Carrier is a Community air carrier (as such term is defined in EU Council Regulation 889/2002 (“the Regulation”)).

 

The Regulation governs the liability of Community air carriers in the event of accidents and the following conditions shall then apply:

(a)        In the event of an accident, the Carrier’s liability is not subject to any financial limit, be it defined by law, convention or contract in respect of damages sustained as a result of death, wounding or any other bodily injury by a passenger.

(b)        The Carrier has a strict liability for the first 100,000 SDRs of any claim unless it can prove that the damage was caused by, or contributed to by, the negligence of the injured or deceased passenger.

(c)        For claims in excess of this limit, the Carrier may be exonerated if it can prove that it took all necessary measures to avoid the damage or that it was impossible for it or them to take such measures.

(d)        The Carrier will without delay, and in the event not later than 15 days after the identity of the natural person entitled to compensation has been established, make such payments as may be required to meet the immediate needs on a basis proportional to the hardship suffered.

(e)        Without prejudice to the above, an advance payment of at least 16,000 SDRs per passenger will be made in the event of death.

(f)         Making an advance payment shall not constitute recognition of liability and may be offset against any subsequent settlement. The payment shall be non-returnable unless the Carrier proves that the damage was caused by, or contributed to by, the negligence of the injured or deceased passenger; or where it is subsequently proved that the person who received the advance payment was not the person entitled to compensation; or it is subsequently proved that the person who received the advance payment caused, or contributed to, the damage by negligence.

 

GENERAL CONDITIONS

 

  1. DEFINITIONS

 

In this Agreement unless the context otherwise requires:-

 

“Agreement”                means this Passenger Aircraft Charter Agreement including the Schedule and any appendices or attachments thereto;

 

“Aircraft”                      means any aircraft for the time being operated in connection with any Flight;

 

“Base Date”                 means the base date stated in the Schedule;

 

“the Carrier”                means the operator of the Aircraft as specified in the Schedule;

 

“Charter Price”            means the amount set out in the Schedule;

 

“Flight”                       means a flight described in the Schedule;

 

“Schedule”                  means the schedule to this Agreement; and

 

“STD”                         means the scheduled departure time of any Flight.

 

  1. CHARTER PRICE AND PAYMENT

 

2.1        The Charterer shall pay to the Intermediary the Charter Price at the time, in the currency, in the amounts and to the address specified in accordance with the provisions set out therefor in the Schedule.

 

2.2        The Charter Price specified in the Schedule is based on aviation fuel costs calculated on the Base Date. If for any reason whatsoever there shall be any increase in the cost of aviation fuel between the Base Date and the date of operation of any Flight, then the Charterer shall pay to the Intermediary on demand such amount as shall fully compensate the Carrier for such increase.

 

2.3       Time of payment of the Charter Price shall be of the essence of this Agreement.

 

2.4        No set-off or counterclaim (whether arising in respect of this Agreement or any other carriage) shall entitle the Charterer to withhold payment of any sums whatsoever payable to the Intermediary under or by reason of this Agreement.  In the event that the Charterer is required to withhold any part of any payment payable by it to the Intermediary hereunder or to make any deduction therefrom, it shall pay such additional amount as may be necessary so that, after making such withholding or deduction, the Intermediary shall receive from the Charterer the full amount of such payment.

 

  1. AIRCRAFT AND CREW

 

3.1        The Charterer acknowledges that the Intermediary acts solely as an intermediary between the Charterer and the Carrier in connection with the provision of the Aircraft for any Flight. The Carrier shall be responsible for providing the Aircraft at the commencement of the Flight properly manned and equipped fuelled and airworthy in accordance with the laws and regulations of the state of registration of the Aircraft and the Aircraft shall be operated in accordance with all applicable laws and regulations during the period of the Flight(s).

 

3.2        The times set out in the Schedule are approximate and not guaranteed and the Carrier is entitled to deviate from the Flight schedule and/or the duration of the Flight and/or to reduce the maximum payload. The captain of the Aircraft shall have complete discretion concerning preparation of the Aircraft for flight, whether or not a Flight shall be undertaken or abandoned once undertaken, any deviation from proposed route, where landing shall be made and all such other matters relating to the operation of the Aircraft and the Charterer shall accept all such decisions as final and binding. In the event that any Flight is delayed through the fault of the Charterer or any passenger, the Charterer shall pay to ACS demurrage at the rate set out in the Schedule.

 

3.3        All ground and operating personnel including cabin staff are authorised to take orders only from the Carrier unless specific written agreement shall first have been obtained from the Carrier whereby certain defined instructions may be accepted by such personnel from the Charterer.

 

3.4        The Carrier may in any event without any liability to any passenger refuse to carry or remove en route, if appropriate, any passenger or his baggage where, in the exercise of its reasonable discretion, the Carrier decides that:

(a)        such action is necessary for reasons of safety; or

(b)        such action is necessary in order to comply with any applicable laws, regulations or orders of any state or country to be flown from, into or over; or

(c)        the conduct, status, age or mental or physical condition of the passenger is such as to:

(i)         require special assistance of the Carrier; or

(ii)        cause discomfort or make himself objectionable to other passengers, or

(iii)       involve any hazard or risk to himself or other persons or to property; or

(d)        such action is necessary because the passenger has failed to observe the instructions of the Carrier; or

(e)        the passenger has failed to submit to or pass any required security check; or

(f)         the passenger’s baggage has not been cleared by all appropriate baggage screening checks; or

(g)        the passenger does not appear to be properly documented; or

(h)        the person presenting the ticket cannot prove that he is the person named on the ticket or the ticket otherwise appears to have been acquired unlawfully or otherwise than from the Carrier or Intermediary; or

(i)         the passenger is not in possession of a valid ticket or any part of the passenger’s ticket has been mutilated, altered by anyone other than the Carrier or Intermediary (if authorised so to do) or is presented without the passenger coupon and all unused flight coupons.

 

3.5        In the event that it is necessary in the flight crew’s reasonable opinion for the Aircraft to be diverted in flight for the purpose of removing any passenger in accordance with the provisions of Clause 3.4 above (whether by reason of the passenger’s conduct or physical or mental condition or for any other reason), the Charterer shall indemnify the Intermediary against any losses, costs, expenses, claims or liabilities which the Carrier may incur as a consequence.

 

  1. TRAFFIC DOCUMENTS

 

The Carrier shall supply or procure the supply of passenger tickets, baggage checks, air waybills and all other necessary documents relating to the carriage undertaken pursuant to this Agreement and the Charterer shall give to the Intermediary all necessary information and assistance to complete such documents as soon as possible after the making of this Agreement and, in any event, in sufficient time to be completed for issue to passengers.

 

  1. FLIGHT TIMES, LOADING AND EMBARKATION

 

5.1        The Charterer shall be solely responsible for ensuring that passengers and their baggage arrive at the specified check-in point at the departure airport in sufficient time to be carried on any Flight. In the event that any passenger of the Charterer fails to arrive in sufficient time to be carried on the Flight the Intermediary shall be under no liability whatsoever to the Charterer nor to such passenger. The Intermediary shall be under no obligation hereunder to make any alternative arrangements for any such passenger. If the Carrier, in its absolute discretion, arranges for any such passenger to be carried on a later flight, the Charterer shall pay on demand to the Intermediary such additional sum that the Intermediary may specify for each such passenger to cover applicable passenger taxes and the administrative costs of the Carrier and the Intermediary thereby incurred.

 

5.2        In the event of any delay (other than any delay for technical reasons the responsibility for which shall lie with the Carrier) deviation or diversion of any flight, the Charterer shall be solely responsible for any and all accommodation, refreshments, meals, transportation or any other additional costs, expenses, losses, damages or liabilities of whatsoever nature incurred in respect of the Charterer’s passengers wherever and howsoever the same shall arise. All such costs, expenses, losses, damages or liabilities incurred by the Carrier shall be reimbursed by the Charterer to the Intermediary on demand.

 

5.3        In the event that any passenger of the Charterer is refused entry at any destination airport, the Charterer shall indemnify and keep indemnified the Intermediary, its officers, employees, servants and agents against any and all cost or expense whatsoever incurred by the Intermediary in respect thereof (including but not limited to charges, fee, penalties, imposts or other expenses levied upon the Carrier or the Intermediary by any immigration authority) or of any arrangements made by the Carrier and/or the Intermediary to return such passengers to the country from which such passenger was originally carried.

 

  1. OBLIGATIONS OF THE CHARTERER

 

6.1        The Charterer shall comply with all the requirements of the Intermediary in relation to the performance of all of the Charterer’s obligations as set out in this Agreement.

 

6.2        The Charterer shall hold harmless and indemnify the Intermediary against all claims, demands, liabilities, actions, proceedings and costs of any kind whatsoever arising from any default on the part of the Charterer or any passenger of the Charterer in complying with any of the provisions of this Agreement.

 

6.3        The Charterer shall comply in all respects with the conditions of all permits, licences and authorities granted for the Flights and will procure such compliance on the part of all its passengers.

 

6.4        The Charterer shall be responsible for the issue and delivery of all necessary passenger tickets, baggage checks and other necessary documents to all passengers.

 

6.5        The Charterer shall comply and shall procure that all its passengers shall comply with all applicable customs, police, public health, immigration and other lawful regulation of any state to/from or over which the Aircraft is or may be flown.

 

6.6        The indemnities contained in this Clause 6 shall survive the termination of this Agreement.

 

 

 

  1. EXCLUSION OF LIABILITY/INDEMNITY

 

7.1        The Intermediary shall be under no liability to the Charterer or to any passenger of the Charterer in respect of any variation to or cancellation of any Flight or the non-availability of any seats which results from the acts or omissions of the Carrier, or for any failure by the Carrier to perform any Flight and the Charterer hereby acknowledges to the Intermediary that in any such event the Charterer shall only have recourse against the Carrier.

 

7.2        The Intermediary shall be under no liability to the Charterer for any failure by it or by the Carrier to perform their respective obligations under this Agreement arising from force majeure, labour disputes, strikes or lock-outs or any other cause beyond the control of the Intermediary and/or the Carrier including accidents to or failure of the Aircraft, its engines, or any other part thereof or any machinery or apparatus used in connection therewith.

 

7.3        The Charterer shall indemnify the Carrier and the Intermediary against any claim by any passenger of the Charterer arising out of any such variation, cancellation, non-availability or failure to perform provided always that if the Intermediary shall receive any refund from the Carrier in respect of any such varied cancelled or unperformed Flights or unavailable seats which have already been paid for by the Charterer, the Intermediary shall (subject to the provisions of Clause 10 hereof and provided always that the Charterer shall have duly fulfilled its obligations under this Agreement), repay such refund to the Charterer.

 

7.4        The Charterer shall indemnify the Intermediary against any loss, damage, liabilities, costs or expenses of whatsoever nature caused to be suffered or incurred by the Carrier or by the Intermediary and their respective officers, employees agents or subcontractors arising out of any act or omission of the Charterer or its officers, employees or agents whether arising in contract or tort (including negligence) or otherwise.

 

7.5        The Carrier shall not be deemed to undertake any carriage to which this Agreement relates as a common carrier.

7.6        Carriage of the passengers shall be subject to the conditions of carriage contained or referred to in the traffic documents of the Carrier including its General Conditions of Carriage.

 

7.7        The Charterer hereby acknowledges to the Intermediary that it recognises that the Intermediary acts only as Intermediary for the Carrier and that the Intermediary is not in any way responsible for the acts, omissions or defaults of the Carrier or the failure of the Carrier to perform its obligations contemplated hereunder.

 

7.8        The indemnities contained in this Clause 7 shall survive the termination of this Agreement.

 

7.9        The carriage of the Cargo on international flights shall be governed by the rules and limitations established by the Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw, Poland, on October 12, 1929, as amended by the Protocol signed at The Hague, Netherlands, on September 28, 1955 (herein collectively called the “Warsaw Convention”) and/or by the rules and regulations established by the Montreal Convention on the Unification of Certain Rules for International Carriage signed in Montreal on 28th May 1999 (“the Montreal Convention”) which rules and limitations shall, to the extent such Warsaw Convention and/or the Montreal Convention is/are applicable, apply to the Flight(s) hereunder.

 

 

 

  1. TERMINATION

 

This Agreement may be terminated immediately upon notice from the Intermediary to the Charterer upon the occurrence of any of the events specified below:-

 

8.1        the Charterer defaults in the payment of any amount payable hereunder on due date; or

 

8.2        the Charterer is in breach of any of its other obligations hereunder which if capable of remedy has not been remedied within 14 days of receipt of written notice from the Intermediary requiring remedy of such breach; or

 

8.3        the Charterer admits in writing its inability to pay or becomes unable to pay its debts within the meaning of section 123 of the Insolvency Act 1996; or

 

8.4        a petition is presented for an administration order to be made up in relation to the Charterer; or

 

8.5        proceedings are started or any steps are taken for the winding-up or dissolution of  the Charterer or for the appointment or a receiver, administrative receiver, trustee, supervisor or similar officer of the Charterer or any or all of its revenues and assets; or

 

8.6        an encumbrancer takes possession of any of the Charterer’s revenues or assets, or any security created by the Charterer becomes enforceable and the mortgagee or chargee takes steps to enforce the same (including without limitation by appointing a receiver or administrative receiver to any of the assets of the Charterer); or

 

8.7        the Charterer convenes a meeting or takes any steps for the purpose of making or proposes to enter into or make any arrangement or composition for the benefit of its creditors; or

 

8.8        a distress or other execution is levied or enforced upon or against any part of the Charterer’s property; or

 

8.9        the Charterer suspends or ceases or threatens to suspend or cease to carry on its business or (expect in the ordinary course of business) it sells, leases, transfers or otherwise disposes of or threatens to dispose of all or any substantial part of its undertakings or assets (whether by a single transaction or by a series), or all or any substantial part of its assets are seized or appropriated by or on behalf of any governmental or other authority or are compulsory acquired; or if anything analogous to the events referred to in 8.3 to 8.8 above occurs in any jurisdiction in which the Charterer conducts its business; or

 

8.10      in the opinion of the Intermediary a material adverse change occurs in the business, assets, condition, operations or prospects of the Charterer; or

 

8.11      any of the events specified in this Clause 8 occur in relation to any guarantor of the Charterer’s obligations hereunder.

 

  1. EFFECT OF DEFAULT

 

9.1        If this Agreement is terminated under Clause 8, then the Charterer shall (without prejudice to any other rights and remedies which the Intermediary may have) pay forthwith to the Intermediary all amounts then due and unpaid hereunder, together with interest thereon (if any) at the rate specified in the Schedule and the Charterer shall indemnify and keep the Intermediary indemnified against all loss, damage, costs, expense, claim or liability incurred or sustained by the Intermediary as a result of such termination and the Intermediary shall be entitled to retain any initial deposit paid by the Charterer pursuant to any provisions therefor set out in the Schedule.

 

9.2        The Charterer shall indemnify the Carrier and the Intermediary against any claims by any passenger of the Charterer arising out of the termination of the Agreement.

 

9.3        The indemnities contained in the Clause 9 shall survive the termination of this Agreement.

 

  1. SET-OFF AND APPLICATION OF MONEYS

 

The Intermediary may at any time without notice to the Charterer at its discretion set-off any amounts paid by the Charterer to the Intermediary hereunder against any amounts then due to the Intermediary under this Agreement or against any amount due at such time from the Charterer to the Intermediary.

 

11.0      GENERAL

 

11.1      Any notice required to be given under this Agreement shall be in writing and shall be deemed duly given if left at or sent by first class post or facsimile message to the address herein stated of the party to whom it is to be given.  Any such notice shall be deemed to be served at the time when the same is handed to or left at the address of the party to be served and if served by post on the day (not being a Sunday or Public Holiday) next following the day of posting or if served by facsimile message upon the day such facsimile message is sent.

 

11.2      This Agreement sets out the entire agreement and understanding between the parties or any of them in connection with the charter of the Aircraft as described herein and supersedes any prior representations, agreements, conditions, negotiations and undertakings whether made orally or in writing in relation thereto.

 

11.3      No party has relied on any warranty or representation of any other party except as expressly stated or referred to in this Agreement.

11.4      No claims shall be made against the Intermediary in respect of any representation warranty indemnity or otherwise arising out of or in connection with the charter of the aircraft except where such representation, warranty or indemnity is expressly contained or incorporated in this Agreement.

 

11.5      No variation of this Agreement shall be effective unless made in writing and signed by both parties.

 

11.6      The Charter Price, payment terms and other commercial terms contained in this Agreement are confidential to the parties and may not be disclosed to third parties without prior approval.

 

11.7      No failure by the Intermediary to exercise and no delay by the Intermediary in exercising any right, power of privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law.

 

11.8      The Charterer shall not be entitled to assign the benefit of this Agreement.

 

 

 

  1. CHOICE OF LAW, SUBMISSION TO JURISDICTION, MEDIATION

 

12.1      This Agreement shall be governed by and interpreted in accordance with English law and the parties hereto hereby submit to the non-exclusive jurisdiction of the English Courts.

 

12.2      The Baltic Air Charter Association provides a mediation service to which parties are able to obtain resolution of any dispute relating to this Agreement or any other aviation related Agreement.

 

Signed for and on behalf of the Intermediary  ……………………………………………………….

Status:    ………………………………………………….

 

Signed for and on behalf of the Charterer  …………………………………………………………….

 

Status:     ………………………………………………..

 

 

DATE:     ……..day of   …………………………………….year………………………………

 

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