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Conversion

Agreements

10 August 2019

Last revised

minutes

5

Reading time

Converting working and naval ships into yachts can save time and money, and the results can be spectacular. Each project is unique and challenging. It is crucial that the terms agreed with the yard undertaking the work are clear, fair and practical. And each such agreement will be as unique as the project.

minutes

5

Reading time

10 August 2019

Last revised

Converting working and naval ships into yachts can save time and money, and the results can be spectacular. Each project is unique and challenging. It is crucial that the terms agreed with the yard undertaking the work are clear, fair and practical. And each such agreement will be as unique as the project.

  • By choice, most shipping agreements, including yachting, are governed by English law regardless of the parties' location.

  • Conversion agreements are subject to the Supply of Goods and Services Act 1982, which implies terms such as satisfactory quality and reasonable fitness for purpose.

  • Yards must use reasonable care and skill in providing services, but it may not meet the high standards expected in yachts.

  • Parties should seek legal advice to create fair and workable terms for conversion agreements.

  • The price for conversion works is usually a fixed fee payable in installments, with adjustments for changes in specifications.

  • The scope of works should be clearly defined, including repair and conversion components, with detailed technical specifications and objective performance standards.

  • The agreement should address interface risks and allocate responsibility for inaccuracies in plans and specifications.

  • A specific timeframe, known as the Redelivery Date, should be agreed upon, with provisions for liquidated damages and cancellation if the project overruns.

  • Other key provisions include force majeure clauses, security arrangements, material ownership, insurance coverage, and warranty periods for remedying faults.

  • The scope of works should be clearly defined, including repair and conversion components, with detailed technical specifications and objective performance standards.

  • The agreement should address interface risks and allocate responsibility for inaccuracies in plans and specifications.

  • A specific timeframe, known as the Redelivery Date, should be agreed upon, with provisions for liquidated damages and cancellation if the project overruns.

  • Other key provisions include force majeure clauses, security arrangements, material ownership, insurance coverage, and warranty periods for remedying faults.