BEWARE Yacht charter cancellation

I'm guessing you used an MYBA agreement. They are contracts by brokers for brokers. However, there are many other charter contracts in use. Under Clause 24, here's the paragraph.

a) The commission shall be deemed to be earned by the Broker and the Stakeholder upon the signature of this Agreement by the OWNER and CHAR TERER and payment of deposit funds by CHARTERER and be payable by the OWNER on the full Charter Fee plus the Delivery/Re-delivery Fee, if applicable, but excluding running expenses, according to Clause 20 on previous page, whether or not he defaults for any reason including force majeure . In the event of Cancellation by the CHARTERER, the commission shall be deducted as an expense from the deposit.

There are several other contracts in common use which do not have those terms in them.

I ve had this issue a couple of years ago but it was just for a day charter when we couldn't make it back to Miami from the exumas in time due to weather. Commission on a day charter is no big deal

As to not chartering any more, put it in perspective... you're not going to cancel charters very often. But yeah, when the broker is able to raccess book the guests they shouldn't be getting double commission. Good luck getting brokers to accept different language.

And two lessons learned. One a warning re: Charter contracts. Perhaps the biggest though is never to sign any contract without reading it completely. The MYBA contract is so obviously self serving for brokers. Basically, we get this, this and this and doesn't matter, but we're not responsible for anything, nothing at all.

Well, if I was going to put a boat into charter, I would never consider doing it under the MYBA contract and there are charter brokers who do so under other more reasonable contracts.

I also would never wine and dine them to the excess so many do. I've never done that in any business. It turns a legitimate profession into a sleazy one sometimes.

Incidentally, I do believe many courts would overrule the clause 24 a. They would see the by broker for broker aspect and consider it unconscionable and inequitable. Problem is it's not worth the time and money to do anything.

In my world of normalcy, the commission isn't earned when the contract is signed. It's earned when the charter is complete.

Lenny, I have a question our of curiosity but also concern. Have you read your boat insurance policy completely, every word?

The vast majority of people have not. We get careless about signing contracts by trusting and sometimes it's not warranted. There are some horrible boat insurance policies that are sold widely to win price battles.

You can't go to a doctor today without signing several things. You sign that if the insurance doesn't pay, you will. Why should you? The doctor has a contract with the insurer and should do what they can get paid for. Medicare has a policy. If the doctor accepts Medicare Assignment, then without you specifically signing for some service, they cannot charge you even if Medicare doesn't pay.

Now you're asked often to sign things on tablets saying you've been provided and read certain documents.

We lease a lot of buildings and in most cases we took over an existing lease, but 95% of the time we will not sign their lease. Most commercial landlords have horribly one sided leases and people sign them because they think they have no choice.

You also should read it. I know it's boring and some is confusing. However, it tells you things you must do to protect your rights. It has the kinds of things that keep you from a tow turning into a huge salvage bill and the insurer not paying. But, yes, good to have attorney read anything we sign. Many of the documents are created by attorneys on the other side.

Problem is that there are many owners trying to charter their boats and desperate to sign any contract...I don't think there is a shortage of charter yachts in New England and there sure isn't one down here in so fl / Bahamas

As to costs, don't forget the $2000 to 3000 annual foreign charter license in the Bahamas...they're cracking down on boats that don't have one.

Most of the small boats chartered in the Bahamas and Caribbean use the CTI (Caribbean Terms Inclusive) contract. There's also specific charterer contracts and Standard Eastern Mediterranean Terms (SEMT) and Greek Terms (GT). Here's a contract without the clause being discussed. It says nothing about Broker receiving commission on a cancelled contract.

https://www.regencyvacations.com/wp-content/uploads/Sample Caribbean Contract.pdf

AYCA (American Yacht Charter Association) has the same provision as MYBA.

Two commissions...yep that does sound like a creative broker contract...

17? Just a guess. Does closest to the real number win a prize? Sorry, couldn't resist.

I am aware as is my wife as is our crew. I look very carefully at anything I sign and require a form like that to be emailed to me in advance to review. Since we're on the customer end, we can't control the deal that the owner made with their broker, but we do control one aspect and refuse to sign anything saying that if we cancel (within their parameters) the broker still gets full commission. We've lined through and initialed that three times, having the broker initial also. Once they said they wouldn't and we said, no deal then and they changed their mind. We never have cancelled but not going to agree to that. I'd encourage any customer to get trip cancellation insurance.

I was also made aware of this practice by the broker we've used to charter as well. They don't use this form on boats they have under charter but obviously run across it on boats under charter with others.

Also, warning to all. Never put your boat under charter without also having an attorney read the contract. There are too many pitfalls. I hate to see someone like Lenny victimized by such an inequitable contract.

X2...ob as you said earlier...the yacht broker contracts are "self serving and nobody is responsible for anything"... except the person signing the contract! Makes it hard for the honest people working in this industry to overcome this sort dishonesty.

Well in all fairness, he's doing twice the work. He lives off commissions and it was to be expected he'd offer a contract securing his pay day.