Yacht Charter Contract Types

A COMPREHENSIVE GUIDE TO UNDERSTANDING CHARTER PAPERWORK
Like anything else in life, it is important to have a contract in place to set out any rights, obligations and cancellation policies. The charter contract will include dates and locations of the charter, details of the payment structure and insurance along with warnings of any unacceptable behavior. Read on for a comprehensive guide to what to expect from your charter contracts.

Although charter paperwork has recently become much more standardized, a charter broker will have plenty of experience with charter contracts and be able to explain any clauses that charterers may find confusing. A charter contract is carefully constructed to protect both the charterer and the yacht owner. Charterers must be aware of maritime rules and regulations and the contract is therefore constructed to ensure the laws of the country to which a yacht is flagged are abided by.

Typically the contracts used are provided by professional organizations, offering the most commonly used contracts in the industry, particularly for large vessels. The most commonly used are CTI (Caribbean Terms Inclusive) and MYBA (Worldwide Yachting Association, formerly known as Mediterranean Yacht Brokers Association)

CARIBBEAN TERMS INCLUSIVE (CTI)

Caribbean Terms Inclusive are also commonly used within the charter industry particularly with small vessels venturing to the Caribbean. Also known as Standard Caribbean Terms, CTI terms are often described as “mostly all-inclusive”. Under the terms of a CTI contract, the below are inclusive of the base charter fee:

  • Hire of the yacht including all water toys and equipment (in full working order),
  • Wages and food of crew,
  • Ship’s laundry,
  • Food only (3 meals daily) for charter party,
  • Fuel for four hours of cruising per day over charter period.

Although some CTI contracts may also include a selection of beverages this may vary, meaning some may include a selection of beverages where others may charge extra for all beverages. Additional fuel costs will also be applicable (including main engines, tender fuel and jet skis etc.) plus berthing fees and communication costs.
MEDITERRANEAN YACHT BROKERS ASSOCIATION (MYBA)

Formerly known as Western Mediterranean Terms, MYBA (Worldwide Yachting Association, formerly known as Mediterranean Yacht Brokers Association) terms are often referred to as a "plus all expenses" contract. Under the terms of an MYBA contract, the below are typically inclusive of the base charter fee:

  • Hire of the yacht including all water toys and equipment (in full working order);
  • Wages and food of the crew for the duration of the charter;
  • Ship’s laundry.

In addition to the above, expenses such as food and drinks for the guests, fuel (including main engines, tender fuel and jet skis, etc.), personal laundry, communication costs and berthing fees will also be applicable.

In order to make the payment structure coherent for guests, the additional expenses for the charter party will often be covered by an Advance Provisioning Allowance (APA) and often equates to approximately 25-30 percent of the base charter fee.

Although MYBA and CTI are the most commonly used contract terms, there are others that charterers may come across when booking a yacht charter and this is often dependent on the size of the yacht and where the yacht is traveling to.
STANDARD EASTERN MEDITERRANEAN TERMS (SEMT)

Although less frequently than the above, SEMT are sometimes still used and offer much the same principles as CTI, however where CTI covers three daily meals, SEMT will only provide breakfast and lunch on the basis that guests are likely to eat ashore most evenings. Under SEMT the base charter fee will include:

  • Hire of the yacht including all water toys and equipment (in full working order);
  • Wages and food of crew;
  • Ship’s laundry;
  • Half board (2 meals daily, breakfast and lunch) for charter party;
  • Fuel for four hours of cruising per day over charter period (may vary);
  • Harbor and berthing fees.

In addition to the above, the charterer will be required to cover any additional fuel costs, food (evening meal), and beverages for charter party, personal laundry, communication costs and any berthing fees outside the usual cruising area. National and/or local taxes may also be applicable.
GREEK TERMS (GT)

Under GT the below are included in the base charter fee:

  • Hire and insurance of vessel with all equipment in working order;
  • Crew wages and crew food;
  • Ship's laundry;
  • Harbor and berthing fees within Greek waters.

In addition to the below fuel costs will be required plus food and drink for the charter party, berthing fees outside the Greek waters, communications costs and local taxes.
IMPORTANT CONSIDERATIONS

Think Fuel
Although some terms are inclusive of fuel for up to four cruising hours per day, it is important to remember that should guests wish to exceed a cruising speed, use jet skis and electricity whilst at anchor, more fuel will be used with the cost applied to the charterer.

Reading the contract
It is essential that each charter guest has a full understanding of the charter contract and how they will be affected by it, therefore each guest should take the time to read the contract and familiarize themselves with the content.

Don’t be afraid to speak up
Although a charter contract may seem daunting at first, it is there to protect both you and the yacht owner. It is critical that guests speak up should they have any questions regarding the contract or are unsure as to how the payment structure is applied or how costs are calculated. Charter brokers are experts in the field and will be able to explain one contract clause to the next, so don’t be afraid to ask.
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