The guide to Superyacht law - Fourth edition

WARRANTY The financial and market problems over recent years have seen a run of claims in the English courts and London arbitration addressing the nature and extent of the obligations of a builder in terms of after sales service to its buyer. We have seen a rising number of contracts in which buyers have raised numerous and extensive claims that frequently go well beyond what the builder is obliged to perform. There is then a tension between the legal obligations under the contract and the commercial desire of the builder to assist and satisfy its customer. The English courts have indicated, following a particularly interesting case in 2000 (recently reinforced in 2016), that a properly worded warranty clause can represent a complete code that governs what is or is not covered by the builder after delivery. With appropriate wording, the warranty clause replaces any liability on the part of the builder for breach of both express and implied terms of the contract with an obligation solely to repair or replace defective workmanship. Essentially the clause becomes an indemnity under which all other damage or financial losses suffered by the buyer would be excluded and it is for the buyer to establish that it ‘qualifies’ for the assistance of the yard. However, with fairly small changes to the wording of a warranty, or a carelessly drafted clause, this complete code can be disrupted, such that the warranty becomes less effective, and may open up the builder to liability for all of the losses suffered by a buyer in connection with a defect.   While much of the attention in concluding a contract will focus on the specification and pricing, we recommend that equal attention is given to what could come after delivery.

15

Made with FlippingBook Online newsletter