Short answer. In the MYBA form, the standard contract for yacht sales in Europe, the words as is, where is mean that the buyer takes the vessel in the state she is in, at the place she lies, as at the date of acceptance, with no seller’s warranty beyond those expressly written into the contract: in practice, title and freedom from debts and mortgages. Whatever the buyer did not check before accepting, he accepts. Under English law, which the form designates by default, the clause takes full effect; under French law it yields before a professional seller or a seller in bad faith.
The MYBA Memorandum of Agreement has been, since the 1990s, the reference contract for second-hand yacht sales in the Mediterranean and well beyond. Brokers use it by default, buyers sign it having read little of it, and most disputes that follow a yacht sale turn on three of its mechanisms: the deposit, acceptance after survey, and the as is, where is clause. What follows is what that clause actually does, what it leaves standing, and how a well-advised buyer or seller adjusts it.
1. How the MYBA contract works, in four stages
On signature the buyer pays a deposit, usually ten per cent of the price, to a stakeholder, generally the central agent. The buyer then has a period in which to arrange, at his own cost, a sea trial and a condition survey with the vessel lifted out. At the end of the survey he notifies acceptance or rejection: rejection, grounded on the surveyor’s findings, brings return of the deposit; acceptance makes the sale firm. Delivery and payment of the balance then take place at the agreed time and place, against the ownership and deletion documents.
Each stage has its default rule. If the buyer fails to pay after acceptance, the deposit is forfeited to the seller as liquidated damages. If the seller fails to deliver, the deposit is returned and damages are due. And the standard form provides that the contract is governed by English law with arbitration in London. That last stipulation, often left untouched by French parties for a boat lying in Antibes, decides in advance everything that follows.
2. What as is, where is means, and what it does not say
The clause operates at acceptance: the vessel is sold as is, where is, in the state she is in, where she lies, as inspected by the buyer. It produces three effects. It excludes any implied warranty of quality, fitness for purpose or correspondence with description, save those the contract expressly preserves. It transfers to the buyer the risk of any defect that a reasonable survey could have revealed, whether or not he commissioned one. And it fixes the reference condition of the vessel at the date of acceptance: damage occurring between acceptance and delivery remains the seller’s responsibility, since he must deliver the vessel in the accepted condition, fair wear and tear excepted.
What the clause does not say is that the seller warrants nothing. The form preserves warranty of title and the undertaking to deliver the vessel free of mortgages, liens, debts and claims, whether yard invoices, crew wages, port dues or registered security. Nor does it cover fraud: a seller who deliberately concealed a defect, disguised a repair or produced an inaccurate maintenance log cannot rely on it, under any law. And it does not extend to the express representations the seller made in the contract or in the annexed documents: engine hours, casualty history, VAT status, regulatory conformity. Those representations are contractual warranties, and their inaccuracy opens a remedy independent of the clause.
3. English law or French law: two readings of the same clause
Under English law, chosen by default, the as is clause sits within a system built on caveat emptor: the buyer protects himself, and implied terms under the Sale of Goods Act may be excluded between businesses or in a negotiated sale. What remains is misrepresentation, meaning an inaccurate statement by the seller which induced the contract, and fraud. A structural defect discovered after acceptance which the surveyor did not see stays with the buyer, unless it is shown that the seller knew of it and said nothing.
Under French law the clause is an exclusion of the warranty against latent defects, permitted by article 1643 of the Civil Code. But case law neutralises it against a professional seller, irrebuttably presumed to know the defects of what he sells, and against any seller, even a private one, who knew of the defect. A charter company reselling its boat, a yard, a broker selling in his own name, a private seller who had received a repair quotation: all remain liable for latent defects despite the clause. The limitation period is then two years from discovery, within a long-stop of twenty years from the sale. The choice of governing law is therefore not boilerplate.
4. Two qualifications that change the outcome
Where the buyer is a consumer and the seller a professional, European protective rules may make the mandatory provisions of the buyer’s country of residence applicable whatever law was chosen, and may allow him to sue in the courts of his own domicile. That single point has decided more yacht disputes than any argument on the merits.
And the sale of a vessel registered in France must, on pain of nullity, be recorded in writing with the particulars identifying the parties and the ship (article L. 5114-1 of the Transport Code). The MYBA form satisfies that requirement, provided it is completed with care rather than left with blanks.
5. Protection before signature: the scope of the survey
Since everything detectable is accepted, the buyer’s protection begins with the survey. A standard few-hour condition survey, hull sounded with a hammer and engines started alongside, will reveal neither incipient osmosis, nor engine wear masked by a cosmetic service, nor a defect in electrical insulation. The contract should therefore state what the survey covers and what, failing that, will ground a right of rejection: lift-out and hull moisture readings, inspection of through-hulls and rudders, engine oil analysis and ECU readouts, a sea trial at full load, verification of safety equipment and regulatory conformity, and a documentary check.
The surveyor must be chosen by the buyer, independent of the broker, and his report must be received before the acceptance period expires, which means negotiating a period long enough, often longer than the form allows. The report has a second use: negotiation. A precise, costed list of works presented before acceptance usually obtains a price reduction or an undertaking by the seller to carry out repairs, recorded in an addendum. After acceptance it is too late.
6. Protection in the contract: warranties, conditions, deposit
The MYBA form is a standard, not a dogma. Its clauses are supplemented by an addendum, and that is where the real protection lies. On the buyer’s side, the addendum adds seller’s representations and warranties: accurate engine hours, absence of declared or undeclared casualty, absence of structural repair, VAT status with supporting documents, CE or equivalent conformity, absence of pending proceedings or arrest, absence of any sanctions measure affecting the seller or the beneficial owner. It adds conditions precedent: finance, effective deletion from the existing register, discharge of any recorded mortgage, approval of the marina if the berth transfers with the boat. It settles the place and manner of delivery, afloat or alongside according to tax constraints, and organises payment through escrow against simultaneous delivery of the documents.
On the seller’s side, the addendum frames the right of rejection, requiring it to rest on defects of a stated significance identified by the surveyor rather than a change of mind, fixes a firm acceptance deadline, and provides for release of the deposit to him without discussion if the buyer defaults. It limits his representations to matters within his knowledge and annexes the documents he stands behind.
7. The deposit deserves its own attention
The deposit is held by a stakeholder who releases it only on joint instructions or on a decision. The identity of that stakeholder, whether broker, lawyer or financial institution, and the conditions of release must be written down. In a dispute the deposit stays blocked and becomes the stake of the litigation.
A buyer who has paid ten per cent on a three million euro vessel and then rejects her on a ground the seller disputes has three hundred thousand euros immobilised until the award. That is a strong incentive to define, in advance and in writing, what a valid rejection looks like.
8. Choosing the law and the forum before signing
The form’s London arbitration clause suits Anglo-Saxon parties and large vessels. For two French parties, or for a boat lying in France, it carries a cost: a London arbitration runs into tens of thousands of pounds before the merits are even reached, which puts a hundred thousand euro dispute out of reach, and English law deprives the buyer of French protections.
Amending the clause is a matter for negotiation at signature: French law and French courts, or French law with arbitration in Paris, for instance before the Chambre arbitrale maritime de Paris, whose costs are proportionate. A professional seller will often prefer to keep English law. It is a negotiating point like the price, and it should be treated as one.
Are you about to sign a MYBA contract, or have you just discovered a defect after acceptance? Before signature everything is negotiable; afterwards, everything turns on the law chosen. An initial discussion sets out what to amend, or what remains possible.
Frequently asked questions
What does as is, where is mean in a MYBA contract?
That the buyer accepts the vessel in the state she is in at the date of acceptance, after survey, with no seller’s warranty beyond those written into the contract, principally title and freedom from mortgages and debts. Any defect a reasonable survey could have revealed falls on the buyer.
Does the clause exclude the warranty against latent defects?
Under English law, largely, save for fraud or misrepresentation. Under French law the clause is ineffective against a professional seller, presumed to know the defects, or against any seller who knew of the defect; it protects only the private seller acting in good faith.
Which law governs a MYBA contract signed in France?
In its standard form, English law with arbitration in London. The parties may choose French law and a French court or arbitration in France. That choice is negotiated at signature and decides the fate of a defect discovered later.
Can the buyer reject the vessel after the survey?
Yes, within the contractual period, by notifying a rejection grounded on the surveyor’s findings; the deposit is then returned. He may also renegotiate the price or require repairs. After acceptance, rejection is no longer available.
What happens to the ten per cent deposit in a dispute?
It stays blocked with the stakeholder, generally the broker, until the parties agree or a decision is handed down. The conditions for its release should be set out in the contract or in an addendum.
Further reading: ship and yacht purchase due diligence, buying a yacht abroad: ten checks, international yacht sales.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and is no substitute for advice on your own matter.