A verbal agreement is sufficient to create a binding agreement.
Second Hand Yacht
As far as a second hand yacht is concerned, most probably it will be the interest of the seller to simplify the sale process as much as possible and quickly receive the agreed price.
However in a deal of this kind the undesirable consequences for the buyer could be numerous. The following issues should be taken into consideration within the sale – purchase agreement:
- Ensure that the yacht and the fittings are in good conditions
- All VAT and taxes due have been settled
- No bills with the marine or yard are outstanding
- All the equipment sold with the yacht has been listed and agreed
- The yacht is free of mortgages or legal charges
- All co-owners agree to sale
- Full insurance cover has been arranged before the ownership is transferred
The size of the investment justifies a cautious approach and have in mind these legal considerations.
When purchasing a brand new vessel either directly to the builder or through a dealer a written contract becomes indispensable.
Three categories of yachts can be identified within the new yacht market: production yachts, semi-custom yachts and custom yachts.
Production yachts are generally the least expensive options and are built in a factory line. There is very little margin to personalise the yacht. These yachts will be made available faster.
The sale and construction contract is typically presented to the buyer in a standard form and there is very little margin for variation.
The purchase of a production yacht could easily be compared to the purchase of a car.
At the other extreme, custom yachts are built in most cases completely according to the ship-owner requirements. A close collaboration and regular visits to the yard during the design and construction of the yacht will be required. Seeking assistance from a qualified surveyor or project management company would be recommended.
When ordering a yacht of this kind provisions on the sale and constructions contract as payment and passing property, price list, building risk insurance, damages for late delivery, arbitration clause or acceptance trial become even more relevant.