Why the yacht purchase agreement matters
Once an offer is accepted, almost everything that follows is governed by the purchase agreement: the inspection period, the buyer's rights after survey, the closing date and place, and the consequences if either side fails to perform. Its deadlines are strict, and a missed notice can change the outcome entirely.
Most brokerage sales use one of a small number of standard industry forms, amended for the particular deal. Standard forms bring familiarity and balance, but the amendments and schedules are where the specific agreement is made.
This guide is general information, not legal advice. For any purchase, an experienced maritime lawyer should review the agreement before it is signed.
The MYBA-style Memorandum of Agreement
For larger yachts, particularly in Europe and internationally, the most widely used form is the Memorandum of Agreement published by MYBA, commonly called the MOA. It is usually governed by English law, although the parties can agree otherwise.
The MOA follows a clear sequence. After signing, the buyer pays the deposit to an escrow agent or stakeholder. The seller makes the yacht available for a sea trial, and then for a condition survey, typically with a haul-out. Within set deadlines the buyer gives written notice accepting or rejecting the yacht. Rights to reject after survey are generally tied to defects of a defined kind rather than to a change of mind, so the definitions in the form deserve careful reading.
US-style purchase and sale agreements
In the United States, brokers commonly use purchase and sale agreements from industry bodies such as the IYBA or YBAA, or similar forms adapted by the brokerage. These are often governed by the law of the state where the transaction is based, frequently Florida for yachts sold in the southeast.
The structure is similar: an offer and acceptance, a deposit held in escrow, a period for survey and sea trial, and a deadline for the buyer to accept the yacht. One difference to watch is how silence is treated. Some forms treat a buyer who gives no notice by the deadline as having accepted the yacht; others treat it as a rejection. Knowing which applies is essential.
The deposit and escrow
A deposit of around 10% of the purchase price is common under both styles of agreement. It is paid to an escrow agent, often the broker's escrow account or a law firm acting as stakeholder, not to the seller, and it is held strictly under the agreement's terms.
Before acceptance, a buyer who rejects the yacht in accordance with the agreement is normally entitled to the return of the deposit, sometimes less agreed costs. After acceptance, the deposit is usually at risk if the buyer fails to complete. If the seller defaults, the buyer is typically entitled to the deposit's return and may have further remedies. The guide to buying a yacht places this in the wider process.
Conditions, acceptance and conditional acceptance
Offers are almost always made subject to a satisfactory survey and sea trial, and sometimes to financing, insurance or other conditions agreed between the parties. The agreement translates these into deadlines and notices.
After the inspections, the buyer usually has three paths. Unconditional acceptance commits the buyer to complete. Rejection, if made within the agreement's terms, ends the deal and releases the deposit. Between the two lies conditional acceptance, in which the buyer accepts the yacht on condition that specified defects are repaired before closing, or in some cases in exchange for an agreed price adjustment. The wording of that notice should be precise, since it defines what the seller must deliver.
Closing and delivery
The date and place of closing are fixed in the agreement, and the place of delivery can carry tax consequences, particularly in Europe, so specialist advice is needed. The guide to yacht VAT outlines the principles.
At closing, the balance of the price is paid and the escrow agent releases funds against the delivery of agreed documents. These commonly include:
- A bill of sale transferring title, free of liens and encumbrances.
- Evidence of deletion or transfer from the yacht's current registry, or a transcript or abstract of title showing she is free of mortgages.
- A protocol of delivery and acceptance, recording the date, time and place at which the yacht changed hands.
- Corporate documents where the yacht is owned by a company, together with class, safety and tax status documentation as applicable.
Reviewing an agreement with Daniel
Daniel prepares and negotiates purchase agreements with his buyers, working alongside their lawyers, and keeps track of every notice and deadline through to closing. If you are approaching an offer, a private conversation early on makes the process calmer.