Must You Use the MYBA Charter Agreement?

29 May 2009 By Benjamin Maltby

Reading the (understandably heated) Forum discussion on Charter Tips, it seems that many in the yachting industry assume that the MYBA Charter Agreement terms are the final word when it comes to the rights and responsibilities of all involved. Well, from a lawyer’s perspective, here’s some news: the MYBA terms will only be the final word if yacht captains and owners let the broker have his or her way.

Owners (and captains if the negotiation is left to them) have the complete freedom to agree to whatever terms they want. That said, the terms drawn up by the MYBA (Mediterranean Yacht Brokers Association) have been well thought through and do cover all the bases, so it’s as good a starting point as any. Also, reinventing the wheel takes time. Just remember that a set of terms drawn up by an association of brokers is quite likely to favor, erm, brokers.

The MYBA Agreement is silent on the subject of the yacht charter tip, but an agreed-upon amount may be written in when filling out the agreement. If you are not happy with commission or gratuity rates written into the agreement for a particular charter, then just scratch them out and renegotiate. The broker won’t negotiate? Find another. What the market can and cannot bear will soon become apparent. Keep in mind, however, that brokers do need to be incentivized if they are to keep up the marketing pressure, especially where their incomes are only derived from commissions. And marketing to the very rich is a particularly expensive business.

There are other matters to consider. The broker marketing the yacht on behalf of the owner will often be, in law, the owner’s agent. As such, the broker must perform with the appropriate care and skill, and not allow any conflict between personal interests and those of the owner. By booking a charter with someone known to be unsuitable, it could be said that the broker wasn’t sufficiently careful and just wanted the commission. However, the MYBA contract will leave the broker all but immune from liability (see Clause 24e). An owner may well thank a captain for spotting the clause before agreement is reached and ask for it to be removed.

Do you really want to keep a term in the charter contract that allows the current president of MYBA to select an arbitrator to act as judge and jury (see Clause 23) in case of a dispute? I doubt it.

Many of the Charter Tips Forum participants referred to the unusually long hours expected of them being a justification for additional money over and above their salaries. This is a perfectly justified sentiment from a moral viewpoint, but in fact the laws of the vessel’s flag state set out clear maximum working hours and minimum rest periods. These are usually generous; and yacht owners may impose further limits (but not increase) the crew’s working hours. Working beyond these hours:

· Puts the lives of everyone on board at risk;

· Exposes the captain and owner to the possibility of a criminal prosecution and removal of tickets; and

· Jeopardizes the yacht’s insurance cover.

The captain always has an overriding legal obligation to refuse to comply with illegal instructions from charterers (or owners for that matter).

The MYBA charter terms are good but not perfect. They’re open for negotiation, and time spent amending the terms to suit the owner and crewmembers better may be time well spent.

What do you think of the MYBA Charter Agreement?