This analysis of the MYBA Sales Contract relates to the MYBA Memorandum of Agreement, a standard form published by the Mediterranean Yacht Brokers Association.
Overview of the MYBA MOA
The MYBA (Mediterranean Yacht Brokers Association) Memorandum of Agreement (MOA) is the industry-standard contract for the purchase and sale of large yachts. It is designed to balance the interests of buyer and seller, but imposes specific duties relating to survey, sea trials, and acceptance that the surveyor must navigate carefully. Although the surveyor is not a party to the contract, their findings often trigger significant contractual consequences, including acceptance, rejection, renegotiation, or cancellation.
Key Clauses Relevant to Surveyors
- Condition Survey & Sea Trial – The Buyer may conduct a full condition survey and sea trial before acceptance. Surveyors’ reports become critical evidence for acceptance or rejection.
- Notice Periods and Deadlines – Strict timelines apply for arranging surveys, conducting trials, and reporting deficiencies. A late or incomplete report may weaken the Buyer’s rights.
- Acceptance or Rejection – The Buyer must declare acceptance or rejection within a set timeframe after survey. Ambiguous reporting may result in default acceptance.
- Defect Remedies – Only material or operational defects ordinarily justify remedies. Surveyors must avoid overstating or understating defects.
- “As-Is, Where-Is” – The yacht is sold in its current condition, with limited warranties. The surveyor’s findings may therefore be the Buyer’s primary safeguard.
Defects Affecting Operation (MYBA Definition)
A defect is any issue not previously disclosed in writing that, in the professional opinion of the Buyer’s marine surveyor, renders the yacht unseaworthy and/or compromises the operational integrity of her systems or machinery. A concise, signed Surveyor’s Statement should set this out in writing. Defects should be graded as follows:
- Structural, mechanical, or other defects affecting strength, seaworthiness, or safety, requiring immediate attention.
- Structural, mechanical, or other defects not requiring immediate attention but to be monitored or remedied within a specified period.
- Non-essential or cosmetic defects, the repair or replacement of which is subject to discussion and at the discretion of the owner.
Typical Defects Qualifying as Class A
- Propulsion/steering faults preventing rated power or safe manoeuvring (engines, gearboxes, steering gear, CPP control).
- Hull/structural or watertight integrity compromised (active leaks, shaft-seal failure, critical through-hull defects).
- Electrical/automation failures jeopardising safe operation (blackouts, inoperative alarms/controls).
- Exhaust/after-treatment issues creating unsafe backpressure or preventing compliant/legal operation.
- Safety/class/flag non-compliance that could cause detention or prohibit operation (e.g., inoperative ER fire detection).
- Fuel/cooling system failures causing shutdowns or overheating at normal loads.
Issues Usually Not Qualifying (Absent Knock-On Effects)
- Purely cosmetic issues (e.g., paint gloss/orange peel, minor interior wear).
- Convenience/amenity systems (AV/IT, hotel services), unless their failure renders a commercially-operated yacht non- compliant.
- Items disclosed in writing prior to MOA execution (and accepted by the Buyer through proceeding with the contract).
Pitfalls for the Surveyor
- Overstepping Role – Limit the report to condition and risk assessment. Do not advise on contract law or financial terms.
- Wording of Reports – Avoid vague terms such as ‘appears sound.’ Use precise, factual, evidence-based language supported by measurements and photographs.
- Liability Exposure – Missed defects risk Buyer claims; overly negative reports may risk Seller claims. Professional Indemnity (PI) insurance and clear disclaimers are essential.
- Misalignment with Timelines – Delayed reports can compromise the Buyer’s rights under the MOA. Inspection schedules must align with contract deadlines.
- Disputes Over ‘Material/Operational Defects’ – This definition may be contested. Surveyors should explain the impact on safety, operability, and cost, but leave acceptance decisions to the client and their legal counsel.
Best Practices for Surveyors Under the MYBA MOA
- Clarity – Use precise, technical language, supported by photos and measurements.
- Timeliness – Deliver reports within contractual deadlines.
- Neutrality – Remain objective; avoid subjective or speculative statements.
- Context – Explain defect implications (safety, operability, cost) while leaving acceptance decisions to the client/legal counsel.
- Documentation – Maintain detailed notes in case of arbitration or litigation.
- Awareness – Understand the MYBA MOA framework to appreciate how your report influences contractual rights.
Surveyor’s Statement – Suggested Wording
“In the undersigned surveyor’s professional opinion, the following defects affect the operational integrity of [system] and/ or render the yacht unseaworthy: [brief facts + test data]. These defects were not disclosed in writing prior to the MOA. Remedies requested: repair scope and/or price allowance.”
Attachments Checklist (with the Buyer’s Notice)
- Sea trial log extracts (load points, temperatures/pressures, alarms).
- Photographs and short video clips evidencing defects.
- Laboratory reports (oil, coolant, fuel) supporting mechanical conclusions.
- OEM excerpts (limits/specifications) and relevant class/flag references.
- Quotes or budgetary estimates for rectification (where available).
Conclusion
The MYBA Sales Contract places the surveyor in a highly influential position, despite their non-party status. Technical findings can determine the outcome of multi-million- euro transactions. The primary risks are unclear reporting, exceeding professional boundaries, and missing deadlines. A disciplined, neutral, and well-documented survey process – combined with clear articulation of operational defects – offers the surveyor the best professional protection.
Surveyor’s professional Indemnity Insurance and its Implications
Professional Indemnity (PI) insurance is an essential safeguard for surveyors, providing protection in the event of claims alleging negligence, error, or omission in the execution of professional duties. PI insurance covers legal defense costs and, where applicable, compensation payments, thereby protecting both the surveyor and the client from substantial financial risk. Its existence enhances client confidence by ensuring a structured mechanism to resolve disputes. However, PI insurance policies are subject to limitations, exclusions, and defined coverage thresholds. Not all defects, claims, or losses will necessarily fall within the scope of cover. It is therefore incumbent upon surveyors to maintain adequate and current PI insurance aligned with the scope of services offered, and for clients the inherent boundaries of such protection.
Legal Caveat
This chapter is provided strictly for general information and should not be construed as legal advice. The MYBA MOA and other yacht sale contracts are complex legal documents, and their interpretation requires the expertise of qualified legal counsel. Surveyors are not parties to these contracts and must refrain from giving legal or financial advice under any circumstances. No responsibility or liability whatsoever is accepted by the author or publisher for any loss, damage, claim, or consequence arising directly or indirectly from reliance on the contents of this chapter. Readers must obtain independent legal advice tailored to their specific situation before taking any action based on the matters discussed herein.
About MYBA
MYBA The Worldwide Yachting Association is an international professional organisation, founded in 1984, with both Corporate and Individual Members. The Association’s mission is to inspire, support and empower people in the superyacht industry to be their best: by maintaining business at the highest level of ethical conduct, committing to equality and diversity, protecting the environment, sharing knowledge and combining strengths, building strong relationships, and continuously developing, both professionally and personally.
All MYBA Members possess a proven track record of professional excellence, and they are involved at many levels and in most of the disciplines of the superyacht industry. MYBA is the Association that brings them together, encourages them to work in harmony to ensure that the industry continues to flourish and guides them on the highest ethical and technical standards.
COMPARISON OF LARGE YACHT SALES CONTRACTS: MYBA VS BIMCO VS U.S. VERSIONS
MYBA MOA (Mediterranean Yacht Brokers Association)
Primary Use: Large yachts, especially in Europe and Mediterranean transactions.
Key Features:
- Includes sea trial and condition survey rights (often referenced in core clauses).
- Strict timeframes: typically tight windows following sea trial and survey for acceptance/rejection.
- Defines Buyer’s rights for remedies, focused on material/operational defects.
- Generally “as-is, where-is” sales, with limited warranties.
Pitfalls for Surveyors:
- Very short timelines; definitions of ‘material/ operational defect’ are open to debate.
- Surveyor’s statements carry significant weight — precision is critical
BIMCO Saleform (Norwegian Saleform 2012/ BIMCO MOA)
Primary Use: Commercial ships, occasionally larger yachts (particularly over 500 GT).
Key Features:
- Commercially-oriented terms; inspections typically framed as dry-dock or diver inspections.
- Seller often obliged to remedy deficiencies if not in agreed condition (subject to rider clauses).
- “As-is, where-is” basis unless amended; includes detailed documentation and delivery clauses.
Pitfalls for Surveyors:
- Reports can directly influence major commercial remedies (repairs, postponements, cancellations).
- Emphasis on class, certificates, and seaworthiness rather than cosmetic issues
U.S Versions (FYNA/ YBAA MOA)
Primary Use: U.S. yacht transactions, including smaller and mid-size yachts.
Key Features:
- Typically longer inspection and acceptance windows than MYBA (10–14 days is common).
- Sea trial and survey usually conducted together; Buyer discretion for acceptance/rejection is broad.
- Deposits and escrow subject to stricter U.S. brokerage laws; strong jurisdiction and arbitration clauses.
Pitfalls for Surveyors:
- Buyers may reject for almost any reason post-survey, so wording carries greater commercial weight.
Key Comparative Points
- MYBA: Balanced but strict deadlines; operational defects are central.
- BIMCO: Commercial focus; emphasis on class/ seaworthiness over cosmetic considerations.
- U.S. Versions: More Buyer-friendly; broader rights and longer timelines
Implications for surveyors
- MYBA MOA: Be precise, timely, and neutral; define operational defects clearly.
- BIMCO Saleform: Focus on class compliance, certificates, and seaworthiness.
- U.S. Contracts (FYBA/YBAA): Avoid subjective or overly negative language; Buyers may withdraw for minor reasons.
By Capt. Phil Duffy