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Old 09-11-2005, 21:45   #1
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Sharing Cost versus Charter

An old question raised its head tonight in my captain’s class. The difference and/or legal situation in chartering versus cost sharing.

If memory serves, things have eased some on the strict definition of chartering when people aboard are simply sharing costs. Can anyone direct me to a link or resource that explains the normal situation at this time?

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Old 11-11-2005, 10:09   #2
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There is indeed a VERY thin line between the two and one must be aware that should any unfortunate accident occur, the lawyers will have a field day with this.

The problem is that some "cruisers" want to fund their cruising lifestyle by having "crew" pay for some of the overheads (fuel, dockage, maintenance, etc.).

Where is that line between "contributing towards own expenses" and "paying crew"? My own guess is that any contribution by crew above an equal share of food, etc., becomes a "paying guest" - with all kinds of serious legal implications.

See: http://www.cruiserlog.com/forums/top...?TOPIC_ID=1040

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Old 11-11-2005, 17:39   #3
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As a person who is chartering...

I agree with Bob. I don't have a link, but everything I have heard suggests that if your guests pay for anything aside from pitching in on food/drinks, it can be considered a charter.
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Old 12-11-2005, 04:52   #4
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Thanks for the replies and link. I thought I had read that there had been an easing in this area. No one seems to share that so maybe my memory is off on this point.

We had friends join us in the Bahamas for a couple of weeks. While they were on board they shared equally in dockage, fuel, water, and provisions purchased.

As a SCUBA instructor I have had students and trip participants sign releases so am certainly familiar with that. I am reluctant to ask friends to do the same. It seems like asking them to sign a release before riding in my car and sharing gas costs on a road trip.

I don’t think these friends would litigate should one of them be hurt but . . . I guess their surviving family would have no compunction about it.

I will have to think long and hard but I will probably continue to share costs with friends if they join us for part of the cruise. I hope by not applying a flat fee but equally sharing actual expenditures I can make a reasonable case that it is not a charter but merely what it is, friends sharing the cost of a trip.

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Old 12-11-2005, 05:10   #5
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I’m not a lawyer so caveat emptor.

”... We had friends join us in the Bahamas for a couple of weeks. While they were on board they shared equally in dockage, fuel, water, and provisions purchased ...”

I would suspect that this might not qualify as a charter fee, as long as the (guest’s) payments were made directly to the vendor, with no involvement by the boat owner.

Any expert opinion?

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Old 12-11-2005, 11:39   #6
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In our own experience of five years of cruising I was astounded at how FEW cruisers carry ANY insurance cover at all.

It comes as an absolute surprise to "recreation/pleasure boaters" that their activity (particularly offshore[local] or in foreign waters) places them within the realm of "General Maritime Law" - SERIOUS stuff. Most think that this applies only to commercial shipping -WRONG!!

Full thread: http://www.cruiserlog.com/forums/top...?TOPIC_ID=1040

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Old 12-11-2005, 15:09   #7
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I do carry insurance coverage and am well aware I am subject to maritime law. Thus the question. I would like to avoid being considered a charter with all the liability that implies and yet would prefer not to be faced with the choice of carrying the full load to host my friends or exclude them from sailing with us.

I guess I would rather host them fully than to not enjoy their company.

I still believe in previous research that I read that sharing costs among friends, when it is clear that that is what it is, has been deemed to not be a charter situation. However, I cannot find my reference and memory not being perfect; I thought someone on this forum might guide me to it.

With the opinion of those answering running against it, I may be wrong. Don't tell anyone I said that.

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Old 12-11-2005, 16:26   #8
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Quote:
I guess I would rather host them fully than to not enjoy their company.
Sunspot Baby
With good friends eventually it works out. Next time they pay for something ashore. If they do then it's even better than any other arrangement you could make. If they never do then it was a smarter that you will ever know.

Sailors take a lot of risks. Risk management is a critical thinking process that can serve you well in more ways than on the water. Matching generousity for generousity is a good thing for friends to do. Testing your generousity against liability under maritime law is not. This is not a risk you have to take - so pass. The risk that your friends might not make it up later is a safer one and perhaps the better bet. That is the risk worth taking. That is something you can count on a friend to do.
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Old 12-11-2005, 18:12   #9
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As the years go by we have fewer and fewer guests. The major problem is logistics. We never really know where we'll be and when. Now, if we're somewhere and they want to fly in, fine, but we don't make plans ahead where we'd have to meet a schedule. We still do have guests occasionally though and it's always fun. If we grocery shop we'll share the bill. There's no formal procedure. It all evens out in the end. As for boat costs, I'd have them whether they were there or not so it's not a factor. Before I started going south I thought I'd charter to my friends and recover some of my costs. I soon dis-abused myself of that idea. Firstly, I couldn't actually ask friends to pay to visit me and secondly chartering is a real business and takes a lot of work to be successful. I just wanted to cruise.
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Old 13-11-2005, 06:48   #10
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Dear Sunspot Baby,

I remember the easing of the rules concerning gratuitous behavior by guests. It was previously held that if your guest bought you dinner after a day of sailing, that was construed as payment for the day out. My memory seems to remember that a maritime court said that wasn't sufficient to constitute a charter, but I will be darned if I can find the link. It is a fair supposition that two brilliant minds can't be collectively in error unless we subscribe to the same dilusional thoughts.
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Old 15-11-2005, 03:38   #11
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Eureka.

Chapman’s says "Until 1993 there was considerable ambiguity over who was a paying passenger and who was simply a guest politely offering to share the cost of a day on the water. New definitions published in Congressional Record S-16963 clarify the situation with unambiguous definitions.”

It goes on to say “Consideration means an economic benefit, inducement or profit (including a payment of money_ accruing to the owner of the vessel. It specifically excludes the voluntary sharing of the actual expenses of the voyage by monetary contribution or donation of fuel, food, beverages or other supplies.”

Of course, the Congressional Record will affect only U.S. waters, but there is the event I was seeking.

Thanks to all.
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