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Rejection Period Starts Before Survey Results?

Discussion in 'General Yachting Discussion' started by Raed Bakhraji, Apr 2, 2025.

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  1. Raed Bakhraji, Apr 2, 2025
    #1
    Raed Bakhraji

    Raed Bakhraji New Member

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    Dubai
    Dear yachting community,
    I am seeking your insights on an issue observed in certain yacht transactions that may complicate matters for buyers. Some purchase agreements are divided into a primary contract, such as the MYBA Memorandum of Agreement, and an addendum outlining critical terms like seaworthiness, delivery obligations, and rejection periods. In one instance, a rejection window of three days was stipulated, calculated from the date of physical inspection rather than the issuance of survey results. This timing can render rejection challenging when defects, such as engine malfunctions or structural issues, are identified only after the survey report is finalized, potentially leaving deposits at risk if not refunded promptly.

    The broker and seller involved (available upon private request) say the vessel is fully operational, though the survey findings differ significantly. Have others encountered similar arrangements with split contracts or tight rejection deadlines, particularly in Monaco’s yachting market? How do you address delays in survey reporting under such terms, and what measures can buyers adopt to safeguard their interests? I would appreciate your experiences and recommendations. Thank you for your contributions.
  2. Ken Bracewell, Apr 3, 2025
    #2
    Ken Bracewell

    Ken Bracewell Senior Member

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    I wouldn't recommend signing a contract with such restrictive timelines. In short, if you don't have enough time to perform due dilligence you should either reject the vessel or ask for an extension via addendum.
    JWY likes this.
  3. Pascal, Apr 3, 2025
    #3
    Pascal

    Pascal Senior Member

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    I don’t know about Europe but here in the US, acceptance / rejection date is negotiated before the contract is signed, along with price and closing date. That deadline is usually set so that there is enough time to do sea trial, oil analysis and survey including getting the reports. If for some reason surveys cannot be completed in time, extending the acceptance date is pretty normal. It s either that or the seller backs out.
    JWY likes this.