How to cancel your yacht charter can be a challenging decision. However, unforeseen circumstances may arise, requiring you to cancel your charter agreement. Understanding the proper procedures and legalities surrounding cancellations is essential to ensure a smooth and professional process.
In this guide, we’ll provide valuable advice on how to cancel your yacht charter in the right way, keeping in mind the charter agreement’s special conditions, and the rights of both the owner and the charterer.
1. How to cancel your yacht charter: review special conditions
Before entering into a yacht charter, it is crucial to thoroughly read and understand the charter agreement (MYBA, ECPY transport contract, new ECPY charter contract or any other such as ISYBA contract) special conditions.
These conditions outline the terms and conditions specific to your charter, including cancellation policies and procedures. Familiarize yourself with the agreed-upon cancellation provisions to ensure compliance.
Main charter contracts used in Europe
- France: MYBA or ECPY charter contract
- Greece: HYBA cahrter contract
- Italy: ISYBA charter contract
2. Understand 'Force Majeure'
Force Majeure refers to unforeseen circumstances that prevent one or both parties from fulfilling their contractual obligations.
Natural disasters, political unrest, or government-imposed restrictions are examples of events that could trigger a Force Majeure clause.
It is important to review the specific Force Majeure provision in your charter agreement and determine if it applies to your situation.
3. Covid addendum
MYBA (Mediterranean Yacht Brokers Association) has drawn up a specific addendum to the standard charter agreement, known as the “Covid Addendum”, setting out in detail the effects that the Covid-19 virus has on the performance of the contract and the relative outcomes.
This addendum allows charterers and owners to agree to a postponement of up to 12 months in the event of unforeseen COVID-19 restrictions or consequences.
4. Cancellation by owner or charterer?
In some cases, the yacht owner may need to cancel the charter due to unforeseen circumstances. If you, as the charterer, receive a cancellation notice from the owner, promptly review the terms outlined in your charter agreement. This typically includes information on refunds, rescheduling, or alternative yacht options. Open communication with the owner or your charter broker is crucial to finding a satisfactory resolution.
See MYBA contract page 4/8 – clause 9: cancellation by owner
Should you, as the charterer, need to cancel the yacht charter, adhere to the written cancellation procedures specified in the charter agreement. Provide written notice of cancellation to the owner or charter broker, clearly stating the reasons for cancellation and referring to the relevant clauses in the contract. Timely communication is essential to minimize potential disputes and facilitate a smoother resolution.
See MYBA contract page 5/8 – clause 11: cancellation by charterer.
5. Importance of the timing & importance of written cancellation
Always remember that cancellations should be communicated in writing. Verbal or informal cancellations may not be legally binding and could lead to misunderstandings. A written cancellation provides clarity and serves as documentation of your intent, ensuring a smoother resolution in case of any disputes or legal considerations.
6. Understand the MYBA Contract
The MYBA (Mediterranean Yacht Brokers Association) contract is a widely recognized standard agreement (8 pages in English) within the yachting industry.
It provides a framework for chartering a yacht and addresses various aspects, including cancellations.
Consult with your yacht charter broker or legal advisor to understand the clauses relevant to cancellations, such as penalties, refund policies, and obligations of both the charterer and the owner.
Important clauses of the MYBA contract:
- ‘Should the CHARTERER give notice of cancellation of this Agreement on or at any time before the commencement of the Charter Period, some or all of the Charter Fee may be retained by the OWNER…‘
- ‘The commission shall be deemed to be earned by the Broker and the Stakeholder upon the signature of this Agreement by the OWNER and CHARTERER 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 of this Agreement, 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…”