Whenever you charter a yacht, you’ll sign a contract that outlines all the various terms and conditions. Most of us pay little attention to this and sign on the dotted line, but it’s important because it’s what outlines what happens if something goes wrong.

These are your protections in black and white, which is why any luxury yacht charter should begin with a thorough understanding of what you’re agreeing to. In yachting, the MYBA charter contract is considered to be the gold standard.

In this guide, we’ll discuss what this charter contract is, how it works, and what the pros and cons are.

What is a MYBA Charter Contract?

MYBA stands for the Mediterranean Yacht Brokers Association. Despite the name, this is actually a global yachting association. The name is a nod to where it all started, back in 1984, in the Mediterranean market.

In the past, there was a wide range of contracts used for yacht charters, but a group of yacht brokers got together to produce a standard for charter agreements. The goal was to achieve the highest possible standards of professionalism and ethics.

All that you need to know as the guest is that this is the most widely recognised form of charter contract, and brokers using it are held to the highest standards.

What Does a MYBA Yacht Charter Contract Include?

Most contracts are several pages long and filled with legalese. As the guest, your attention will focus on several clauses. To help you understand how these contracts work, we’ve included the seven most pivotal clauses that make these agreements work:

• Delivery/Redelivery – This clause defines where your yacht should be delivered and returned. It includes the precise timing and location, and what happens if the charter company fails to deliver on their promises.
• Captain’s Authority – You’ll notice that this section outlines the requirements of the captain and the crew. It details their legal authority, including in relation to itinerary changes, safety decisions, and how any conflicts and disagreements are managed.

• Cancellation – In the unlikely event your charter has to be cancelled because of unforeseen circumstances, such as political unrest and natural disasters, the cancellation policy outlines how refunds and reschedules are managed. The aftermath of the pandemic has seen significant revisions to this section.
• Breakdown/Failure – Technical failures are rare, but they do happen. If you experience unexpected downtime and the yacht becomes unusable, this section outlines whether you’re entitled to a refund or a replacement vessel.

Payment, Insurance, and Arbitration

• Payment – The payment section discusses how deposits, balances, and the APA are managed. This will include discussions over port fees, fuel, food, and any special requests.
• Insurance/Liability – Pay special attention to this section, as it covers the yacht owner’s insurance policy. It also outlines which risks are the responsibility of the person chartering the vessel.
• Arbitration – MYBA agreements are always settled via arbitration in London, meaning it falls under the jurisdiction of English law. Essentially, this is the dispute resolution section, but note that certain jurisdictions may override this section.

Pros of a Charter Contract from the MYBA

These contracts were conceived not by legal professionals but by yacht brokers themselves. It’s this lineage that means they’re ideal for serving the unique needs of the yachting industry. So, what are their main benefits?

The Professional Industry Standard

Some yacht owners and charter companies will have their own unique terms and conditions, so they’ll use their own contracts. On the other hand, most prestigious yachting brokers and charter companies will rely on the MYBA contract.

What makes them so prized is that they aren’t available to just anyone. The only way to access these contracts is to be a member of the MYBA, and that comes with an extremely high bar. In short, if you’re working with one of these contracts, you know that you’re working with a charter brand that’s respected throughout the business.

Standardization and Clarity

Before these contracts came along, contracts were individual affairs that would differ from charter to charter. You’re not a legal professional, so it often means not having a full grasp of the implications of signing a contract.

In contrast, MYBA contracts are standardized, meaning they’re accepted across the industry on a global basis. Once you’ve signed one, you’ve signed them all, and that’s vital for reducing ambiguity for both sides.

Protection for All

Charter a yacht, and you want to know where you stand, and that’s precisely what these contracts provide. Both parties are fully protected by the clauses contained within. Some of the aspects covered include:

• Delivery
• Crew
• Authority of the captain
• Cancellation
• Breakdown
• Payment
• Insurance

Every aspect of the charter is addressed, which reduces the potential for any disputes later on.

Financial Transparency and Accountability

Investing in an epic adventure is no small matter. You want to know what you’re paying for and where that money is going, so that you can concentrate on the joy of taking to the waves. That’s why this type of contract is so valuable for any luxury yacht charter.

It promotes complete transparency in finances, including the Advance Provisioning Allowance (APA) and other expenses, so that all parties can be held properly accountable.

Arbitration Clause

Even the best contract in the world can still result in disputes. The MYBA charter contract acknowledges this possibility, which is why it includes an arbitration clause promoting confidential resolution.

Most clients don’t want to involve themselves in public court litigation, especially when it comes to superyachts and where famous faces are involved. Rather than getting into messy legal matters, the contract allows for confidential arbitration that can halt problems before they escalate.

Cons of a Charter Contract from the MYBA

No contract is perfect, and it would be wrong to state that these are any different. Sometimes, it’s a contract that might not be suitable for you for one reason or another. Here’s why you might prefer to use a different type of contract for your charter:

• Lack of Flexibility – The standardization within these contracts also means there’s limited flexibility. Accommodating specific requests and complex legal requirements may require a non-standardised contract instead.
• Enforceability – Local law still takes precedence over anything contained within these contracts. Depending on where you are, some clauses and provisions might be unenforceable if a dispute happens within a certain jurisdiction.
• Additional Costs – These charter contracts operate on the “plus all expenses” model, which uses an APA. This can mean that clients may have to deal with extra costs.
• Complexity – Although the goal was to standardize contracts throughout the charter industry, there’s no getting away from the fact that these can still be highly complex documents. Some clients might struggle to understand what they’re getting into.

Everyone wants a sound charter experience, but it’s important not to skip over the legal aspects. If you’re struggling to understand the contents of a contract, it’s vital to seek professional advice. Or you could run into problems later.

How MYBA Charter Contracts Work in Practice

Contracts might feel like they’re just another bureaucratic formality you’ve got to jump through, but they’re not. Although the chances are you’ll never have an issue with the paperwork, contracts demonstrate their worth when things go wrong, whether this is at sea or in port.

So, let’s go through some of the most common real-world examples of when these types of contracts come into play.

Mid-Charter Mechanical Failure

Imagine you’ve embarked upon a grand tour of the Mediterranean this summer and everything is going well. A few days into your voyage, the vessel experiences an enormous engine issue, forcing the boat to limp back to port. Eventually, you find that you are stuck in port for 24 hours while repairs are carried out.

The MYBA contract includes clauses that, when downtime exceeds a particular threshold. For example, 24 consecutive hours, you’re entitled to a partial refund. Some contracts might also allow for a replacement yacht if the damage can’t be resolved within a certain period.

Charter Crew Misconduct

These contracts outline the captain’s responsibilities and the extent of their authority. Of course, most skippers and their attached crews are consummate professionals. However, there are always a few rotten apples that spoil the rest. Likewise, the same goes for guests. Many charter guests are surprised to learn that captains do have legal authority onboard.

Whether a crew member has stepped out of line or a guest has violated the safety standards of the vessel, a MYBA agreement empowers the captain to take all the necessary steps to protect the vessel. That could also mean prematurely ending the charter and heading straight to the nearest safe port.

Delayed Yacht Delivery

It’s everybody’s worst nightmare. You arrive at your port of choice only to find that your yacht isn’t ready to go because of a scheduling issue. Again, this is where MYBA clauses come into play. The charter company must have your chosen vessel ready for your departure date.

If a yacht isn’t there at the right time or place, your contract will outline whether you’re entitled to compensation. It could include a partial refund or an extended charter. These are the clauses that prevent finger-pointing and resolve disputes quickly.

When a MYBA Charter Contract Isn’t Right for You

We’ve discussed the disadvantages of an MYBA contract for your luxury yacht charter. Although it’s considered to be the gold standard for charters of this nature, it’s not the best fit for every conceivable situation. Sometimes, another contract may offer cost control and convenience to a greater degree.

So, what are some of the most common real-world scenarios where you may want to consider a different type of contract?

·  All-Inclusive Packages – Since these contracts use the “plus expenses” model, they can be complicated because guests gain more control over issues like fuelling and provisioning. Some guests prefer to keep everything as straightforward as possible, which is why they opt for all-inclusive pricing. For these guests, the Caribbean Terms Inclusive (CTI) may be a better option.

Are There Other Disadvantages of Using a MYBA Contract?

·  Smaller Vessels – MYBA agreements were designed primarily for luxury yachts with a full crew. Generally, if you’re chartering a boat under 80 feet, or a bareboat charter, many of the clauses and provisions in MYBA contracts won’t be relevant and might seem excessive. Local contracts may be a better fit for these situations.

·  Customized Itineraries – Non-standard charters dealing with non-conventional legal jurisdictions and special requests often don’t work with these contracts because of their standardized nature. In these cases, a bespoke legal agreement will usually get the job done to a superior degree.

Of course, if you’re dealing with a broker or owner who isn’t a member of the MYBA, you may not be able to use this contract in the first place. Some owners and brokers have their own legal teams with a preference for proprietary contracts. There’s not necessarily anything sinister about this, but it does mean a MYBA agreement won’t be the best choice, or even an available one.

Conclusion: Book Your Charter Today

Signing a contract means you’re committing to your charter. Don’t rush to sign a contract just to get it over with, because you must have everything in order to maximize your charter experience.

Speak to an experienced broker or charter organization who can manage all the details so that you can embark upon your adventure of a lifetime this coming sailing season.

MYBA Charter Contract FAQs