• Post-delivery warranties: What is the warranty period? What will it cover? Does the warranty extend if an item is fixed during its original warranty period? Is major equipment (e.g. engines and gensets) actually covered by original manufacturer warranties or the builder? If so, how long are those warranties? What happens if the buyer carries out repairs without consulting the builder, despite there being warranty provisions in place? Consideration should also be given as to whether the buyer should have limited rights when it comes to latent defects. • Termination: If it all goes wrong and the contract is terminated, what happens? If the builder terminates due to a buyer’s default, is the builder suitably protected so as to recover its losses and damages? To what extent can the builder recover its losses? If the buyer terminates due to the builder’s default is the buyer protected to receive all his money back or to remove the yacht in her current state of construction and complete it elsewhere? Consider that if the buyer choses to take delivery of the unfinished yacht will he receive all the documentation and the design work and all the class and flag approved drawings to complete the build elsewhere.
• Commission: While not generally mentioned in the build contract, if the buyer is introduced to the builder by an intermediary, a commission may well be payable by the builder. Transparency on the amount of the commission, even though not always available, should nevertheless be accessible to a buyer. • Payments: must come from an account in the name of the buyer entity, not from an account controlled by another company or by the ultimate beneficial owner. If accusations of money laundering surface, the builder will be put to proof that they are certain where the money comes from and may be required to offer up payment details to customs or other governmental authorities — without referring back to the buyer first.
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