Buying a yacht? What happens when something goes wrong

At this year’s Monaco Yacht Show, a client approached us between meetings. He was negotiating a Memorandum of Agreement on his first yacht and had clearly been doing his homework. He had been struck particularly by what he had read about a 30-metre yacht that sank in Sardinia this summer, only days after delivery, and it had rattled him.
  

The MYBA Memorandum of Agreement and the post-delivery risk that catches buyers off guard

His question was direct: what if we complete, and something serious turns up two weeks later — something the survey and sea trial never caught? What can we actually do?

It was exactly the right question and the honest answer, for most buyers, is uncomfortable.

This article sets out the position we explained to him, based on how a standard MYBA Memorandum of Agreement allocates post-delivery risk. It is not legal advice for any particular transaction, but it is the framework every buyer and seller should understand before closing.
  

The seller's disclosure obligation is narrower than most buyers expect

The MYBA MOA operates on an “as is, where is” basis once the buyer has completed its inspection. A seller must not actively misrepresent the yacht’s condition or fraudulently conceal known defects, but there is no general, freestanding duty to volunteer every piece of adverse information. The line between silence and concealment is fact-specific and jurisdiction-dependent and in my experience, it is the source of more post-closing grievances than almost any other issue in yacht transactions.
   

The inspection window is the buyer’s opportunity — and it is deliberately finite

A sea trial and haul-out survey under the MYBA form are time-limited and scope-limited by design. The buyer appoints their own surveyor, decides what to inspect, and bears the cost. Plenty of latent mechanical or structural issues simply will not present themselves in a standard inspection window. That is not a flaw in the contract. It is the allocation of risk the contract was designed to achieve.
   

Delivery and acceptance: the point of no return

Under the standard MYBA MOA, once the buyer accepts delivery, the yacht is taken in the condition as inspected and agreed. Absent fraud or active misrepresentation, the buyer’s contractual recourse against the seller for condition-related defects is effectively extinguished. This is the clause that catches first-time buyers off guard and it is the one that experienced brokers and lawyers spend the most time explaining before closing.
  

Manufacturer warranties: a potential lifeline with its own limits

If unexpired manufacturer or equipment warranties exist at the time of sale, they can be valuable, but assignment is not automatic. Most will require the manufacturer’s written consent, and some are expressly non-transferable. Even where assignment succeeds, the buyer’s claim runs against the manufacturer on the manufacturer's own terms, not against the seller. The seller drops out of the picture entirely.
 

What actually survives delivery?

Under a standard MYBA MOA, the seller’s principal surviving warranty is as to clean title: that the yacht is free from encumbrances, mortgages, maritime liens, and outstanding debts. That is a distinct and important protection, but it addresses ownership risk, not condition risk. The two are fundamentally different.
  

Areas that deserve more attention

A number of areas rarely receive sufficient attention at the negotiation table:

Governing law matters more than most people realise

The MYBA MOA allows the parties to choose the governing law. That choice can materially affect the scope of implied duties, the availability of tortious claims such as negligent misrepresentation, and the remedies available post-delivery. Opting for Florida law instead of English law, for example, is not a boilerplate decision.

Tort claims may survive even where the contract is silent

Depending on the governing law, a buyer may have recourse in tort even after contractual claims are foreclosed. The interaction between the MOA’s contractual framework and the applicable tort law is one of the most under-analysed areas in yacht sale transactions.
 

Conclusion

The uncomfortable truth is that in a standard MYBA sale, the buyer carries far more post-delivery condition risk than most first-time purchasers expect. The contract is designed that way. Understanding that allocation before signing — not after something goes wrong — is what separates an informed buyer from an exposed one.

If you have any questions about buying or selling a yacht, or about the MYBA Memorandum of Agreement, please contact Ezio Dal Maso or your usual Stephenson Harwood contact.

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