Mastering the Memorandum of Agreement in yacht acquisitions
You have signed a Letter of Intent, secured exclusivity, and stand ready to make your dream a reality. What comes next? The Memorandum of Agreement (MOA)—the document that transforms aspiration into ownership.
The MOA: your yacht purchase contract
Think of the MOA as the DNA of your yacht transaction. It binds the deal, covering everything from price and payment to delivery and documentation. Two standard forms dominate the market:
MYBA MOA: The European and English law standard—our focus here.
IYBA MOA: The preferred form for US-based transactions under Florida law.
Understanding the MYBA MOA
Here is the first thing every buyer should know: the MYBA MOA tends to favour the seller. The contract places the burden squarely on you as buyer—fail to reject the yacht within strict timelines and for specific reasons, and you could be obliged to complete the purchase or forfeit your deposit. Understanding this dynamic is essential before you sign.
The MOA has two parts:
The Printed Form: Standard terms forming the agreement’s backbone.
Addendum 1: Where the parties tailor provisions to suit the specific deal.
Five things every buyer must know
1. Deposit and Stakeholder
You pay a 10% deposit on signing, held by a stakeholder (typically a broker or lawyer). This deposit unlocks sea trials and surveys—and secures the seller against your default.
2. Sea Trials and Condition Survey
Sea Trials: Your chance to test the yacht’s performance. Dissatisfied? You can walk away and recover your deposit—no questions asked.
Condition Survey: If sea trials go well, the yacht is hauled out for detailed inspection. From this point, your exit options narrow considerably—you can only reject if a “serious defect” (as defined in clause 27) emerges. Miss that window, and you are committed to complete.
3. The essential “boxes”
The MOA’s boxes capture the deal’s vital statistics: purchase price, party names, cancelling date, delivery location (often international waters for tax efficiency), payment terms, and required documentation.
4. Assignment Rights
The MOA binds once signed and the deposit is paid. Smart buyers sign personally but reserve the right to assign to a company or trust before completion—avoiding unnecessary structuring costs if the yacht is ultimately rejected.
5. Delivery and Completion
The finish line: delivery typically occurs in a tax-neutral location (international waters being the classic choice), where price, documents, and certificates change hands simultaneously. Get this choreography right, and you take the helm as the new owner.
Practical Steps When Signing
Ensure all commercial terms are clearly recorded in the MOA and Addendum 1.
Confirm that all parties, brokers, and the stakeholder sign the MOA.
Pay your deposit promptly—delays can jeopardise the deal.
Engage specialist legal counsel before you sign—not after.
The Bottom Line
The MOA is where yacht dreams become binding commitments. The MYBA form provides a robust, internationally recognised framework—but its seller-friendly defaults mean buyers must approach it with eyes wide open. Understand the key provisions, document your terms precisely, and you will be well positioned for a successful acquisition.
The MOA also governs what happens if things go wrong—termination, default, and their potentially severe consequences. This is where expert guidance becomes invaluable. At Stephenson Harwood, we have guided countless clients through MYBA transactions, protecting their interests at every stage. Ready to move forward? Get in touch.
To discuss your yacht acquisition strategy, contact Ezio Dal Maso or your usual contact at Stephenson Harwood
