Non-Legal Fine Points of Yacht New-Build and Refit Contracts - X
NEVER OVERLOOK THE IMPORTANCE OF A DETAILED GENERAL SPECIFICATION
Few, if any large-yacht building projects begin with fully developed engineering. Preliminary engineering, perhaps, but not fully developed. This is because few, if any buyers or owners are willing to wait long enough for a complete engineering package to be completed before starting construction, let alone wait for relevant engineering and plans to be submitted to a classification society for review and approval. Therefore, it is critical to assure that a sufficiently detailed general specification is developed and agreed to before the contract for a new project is executed.
A detailed General Specification presupposes that sufficient preliminary engineering has been completed...
Naturally, any commitment to a detailed general specification presupposes that sufficient preliminary design engineering has been completed in order to judge whether the yacht can, in fact, be built as envisioned in the proposal.
A preliminary weight study and preliminary hydrostatics are essential to estimating power requirements and performance, as well as fuel tankage and range, draft, and stability. All to establish whether the proposed project is grounded sufficiently in reality, and whether there are any glaring points of dissociation with what is actually achievable.
For example, one can pretty much tell from a sufficiently detailed general specification whether the yard plans to employ a realistic program of weight control. If the answer is no -- and if the basic details of the yacht call for a static displacement significantly less than that of vessels roughly comparable type and size -- then one can conclude with reasonable certainty there are going to be problems with achieving targeted performance and/or range.
A detailed General Specification also defines precisely the subject of the contractual agreement, and gives meaning to "the deal"...
Of course, it's always better to have the engineering for structure and ship fitting complete before making such judgments, especially when weight and performance are critical issues. But the hard reality is that the pressures of getting to contract and starting a build commonly preclude waiting for the development of a full engineering package.
Consequently, it is not only advisable, but essential to complete a detailed General Specification prior to executing the
The General Specification should normally be incorporated into the build contract, if not physically, then by reference. For it will prove in almost every case to be a critical factor in avoiding owner-shipyard disputes down the road.
The General Specification needs to be more than simply a boiler-plate re-compilation of standard yard practice...
The General Spec needs to be more than simply a boiler-plate re-compilation of some of the shipyard's prior builds; it needs to be a thorough, relevant, and very detailed document. For example, a new build 80 footer I am currently supervising required writing an 80-page General Spec, and then going over it line by line with shipyard reps prior to my client executing a contract. And skimping on the work that goes into developing such a specification is an invitation to dall manner of disagreement and trouble on down the line during a build. — Phil Friedman
Author's Notes: This wraps up this series on some key non-legal points regarding yacht new-build and major refit contracts — at least, insofar as I see them. I don't harbor any illusions that these discussions are in any way exhaustive of the topic, and I welcome your comments and criticisms.
None of this series has been intended to be legal advice. However, the information, opinions, tips and comments offered are based on my 30 some years in the yachting industry, including my several-year stint as president and CEO of a major, world-class megayacht shipyard.
If you find yachts and yacht building of interest, you may want to read some of my other marine industry related articles:
"Sizing Generators to Run Greener and Cleaner"
"Financial Protections for New-Build Yacht Buyers"
And if you'd like to receive further installments of this ongoing series, or regular noticiations of my other writings on a regular basis, click the [FOLLOW] button on my beBee profile. As a writer-friend of mine says, you can always change your mind later.
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About me, Phil Friedman: With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.
Currently, I am supervising, as owner's representative, a new yacht build in Taiwan. For a free 1/2-hour consult concerning your current or planned project, email email@example.com
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Text Copyright © 2016 by Phil Friedman — All Rights Reserved
Images: Courtesy of Port Royal Group LLC and Phil Friedman
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