Legal Contract for a New Build?

When negotiating multi-million dollar contracts, legal fees should be the least of your concern and retaining a contract lawyer prudent advice.
Try someone like this, or have them refer someone to you.

http://www.lawcareers.net/Solicitors/Specialisations/shipping.aspx

*Google

Dito, Dito. That said, those positions don't look out of line although I am NOT an attorney. Often it's in the way things are termed though. Where companies will rarely guarantee a launch date you could offer a bonus for meeting a launch date. Same for speed. Your insurance company takes care of you, their's them. That's all just logic not law. Yachts are complicated in every respect. Let an attorney represent your interests. There are just too many T's and i's.

I too agree that most builder's will not guarantee a launch date or speed. I would not rush either of them or the builder might be apt to cut corner's to meet a launch date or build the boat light to make the speed requirement.

I too would recommend spending the money on a lawyer. It would be well spent in my opinion.....

Italian law

I would like to warn you that the builder will be treated under Italian law and hence the contract will be subject to Italian law. Therefore, I suggest you employ a lawyer that is proficient in Italian law for building boats. I've heard some funny stories where buyers had some suprises in such process.

Hi,

I have not seen a build contract with no agreed delivery date. There is also usually a short grace period after this, before the penalty phase kicks in.

Performance-It seems strange where the yard are proposing to build you a custom boat which is presumably not the first in the series, if there are previous ones and you know factually the performance not just what the yard tell you should add the hull numbers of these into your contract as a reference.

Insurance- You or your company will not actually own the vessel till delivery and the final payment. Up to that point the insurance should have nothing to do with your side of the deal and should be covered by the yard. I would advise you get some proof of their insurance cover and or a bank guarantee added into the contract as well.

Nilo's point about the language of the contract and the language of the law is also very important to deal with properly.

Attorneys- You wouldn't use a real estate attorney if you were up for murder so make sure the attorney you are using to deal with this contract has verifiable experience in marine matters, and preferably dealings in Italian yards.

Both the builder and the buyer have complete leeway in how a contract is writen, and if my lawyer is writing the contract it will be totally one sided for my protection. Why should he try to protect you. That's what your lawyer is for. You on the other hand have the freedom to negotiate or to tell me to jump in a lake. Until the contracts are signed and the builder has your money the deal is your's to make or not. Let your lawyer sweat the details. If you're not comfortable move on to another builder. Remember, without the customer the yard just has a yard. He has to sell boats. You don't have to buy.

Hi,

NYCAP- I think with your opening statement you have just demonstrated your inexperience in these matters.

The finished contract should be fair to both parties, having it one sided either way only leads to antagonistical builds- believe me I have been involved in a couple.

K1W1,
You said it yourself with your final sentence. Contracts and the law have nothing to do with fairness. It's adversarial. When was the last time you were asked to sign a contract that was written to protect you?

Hi kreton:
Welcome to the un-fun aspect of the boat business. Contracts normally give structure to a deal except when one harbors suspicions regarding clauses a/k/a 'hooks' which obviously give you pause.
You mentioned dealing with a dealer for the builder. Have you asked for a meeting with the management of the builder? Perhaps this may allay some of the fears you have. More than one constructor, from my personal experience, have put the prospective buyer in touch with a previous client; their confidence in their own fair dealings come out if they allow this...and if they have something in the way of dirty laundry, they will not do so.
I have no knowledge of Italian law, but good advice has been given by others above in the need for not just legal counsel, but admiralty--as opposed to civil--to protect your interests.
Over a dozen years ago, I brokered the purchase of a 167-footer lying Norway with a German listing broker under the auspices of what was (still is?) known as The Swedish Contract with embedded London Arbitration clause for a Chilean client.
At the end of the day, with the added paperwork complexity, all parties merely wished to see the deal come to fruition and not end up as a major hash involving Legalman.

Good luck.

Kreton,

You may want to talk with the boat builder directly, instead of talking with the dealer. A lot of times companies have their lawyers draw up their "form" contracts, with the purpose of protecting the company. The companies then send out their contracts to their dealers, who usually have no negotiating power when it comes to these contracts. This in turn means that you can't change provisions in the contract while talking with the dealer.

When you pick an attorney, make sure that you have picked someone who knows the substantive law that will govern the contract.

Also, on a side-note, I am not sure how things work in the marine industry, but you may want to try including a 3rd party satisfaction clause in the contract. This would allow you to hire an independent yacht surveyor who would examine the yacht making sure it is up to standard.