Vessel Sale Agreement (MOA): Structure, Critical Clauses, Negotiation

The legal foundation of any vessel or ship acquisition is the Memorandum of Agreement (MOA). It is built on internationally standardised templates — NSF, SAJ, BIMCO Saleform — that the maritime industry has used for decades. This guide explains the MOA's structure, its critical clauses, and where to focus during negotiation.

What this guide covers

What an MOA is and how it differs from a classic real-estate sale
Standard templates: Saleform, NSF, SAJ
Critical clauses — payment terms, condition warranty, encumbrances
Negotiation pressure points
Closing procedure
Synchronising the MOA with the financing process

Note: This page is educational. We do not quote specific commissions, taxes or deposit percentages. It is not a substitute for legal advice — your legal counsel and financing advisor must work side by side on a project-specific contract.

What is an MOA?

A Memorandum of Agreement is the international standard sale contract for vessel and ship transactions. It is signed between buyer and seller, and its clauses rest on industry-standard templates.

How it differs from a classic real-estate sale:

| Dimension | Real estate | MOA (vessel) | |---|---|---| | Standard | Varies by country | International standard (Saleform etc.) | | Language | Local | English (in cross-border deals) | | Deposit | Per country practice | Typically 10%, in escrow | | Delivery | Keys handed over | Physical + legal transfer (registry change) | | Inspection | Often a survey | Survey is mandatory (buyer's side) | | Cancellation | Limited | Usually subject to survey outcome |

Standard templates

Three templates dominate the market:

1. Norwegian Saleform (NSF)

The most common international template. In use since 1956, latest version 2012. Considered balanced between buyer and seller; familiar to both sides.

2. SAJ (Shipbuilders' Association of Japan)

Centred on Japanese yards. More common in newbuild contracts than in second-hand vessel sales.

3. BIMCO Saleform 2012

The BIMCO-updated version of NSF. Contains modern provisions.

For the yacht segment: NSF / Saleform 2012 is the usual choice. Yacht brokers are experienced in preparing it.

Critical clauses — what to watch

1. Sale price + payment terms

Total price (typically € or $)
Payment method (single tranche vs. milestone)
Deposit amount — typically 10%
The escrow account holding the deposit
How the balance is transferred at closing

2. Condition of vessel

If the vessel is sold "as is, where is," this must be explicit
Warranty that the class certificate is in class
Warranty of being free from encumbrances (mortgage, creditors, liens)

3. Inspection (survey) clause

The buyer's right to an independent survey
Survey completion deadline
Buyer's right to cancel if the survey is unsatisfactory
Deposit return in that scenario

4. Delivery date

Closing date (subject to fulfilment of conditions)
Late delivery penalties
Force majeure definition

5. Encumbrances

How any existing mortgage will be discharged
Warranty against past creditor liens
Statement of no outstanding port / marina debts
Treatment of any existing charter contracts

6. Risk transfer

Exact moment risk passes from seller to buyer (typically at closing)
Insurance remains with the seller until closing

7. Arbitration / governing law

Where disputes will be resolved
Governing law
London arbitration (LMAA) is the common preference

Negotiation — who wants what?

Typical negotiation dynamics:

Buyer typically wants:

Lower deposit (liquidity risk)
Longer survey window
Walk-away right on "failure of survey"
Broad warranty against encumbrances
A firm delivery date

Seller typically wants:

Higher deposit (buyer commitment)
Short survey window
"As is" sale (protection against prior findings)
Flexible delivery date

The negotiation finds the middle ground. A professional broker manages this process.

Synchronising with the financing process

The financing process should run in parallel with the MOA:

MOA negotiation begins → financing pre-discussions begin
Survey → the financier waits for the survey report
MOA signature → financing committee decision runs in parallel
Closing → financing drawdown + registry change + mortgage perfection + funds transfer

"Subject to financing" clause: some buyers make the MOA conditional on financing approval. This gives the buyer a walk-away right if financing falls through. It is a risk for the seller; the deposit may be at stake.

A healthier approach: obtain an indicative financing offer before signing the MOA.

Closing procedure

A typical closing day:

Buyer + seller + banks + surveyor + registry representative + legal counsel all present at the location
Surveyor performs the final delivery survey
Vessel is confirmed ready for physical delivery
Bank transfers the loan amount to the seller's account
Buyer transfers any remaining equity
Registry transfer is executed and recorded
Mortgage is perfected in favour of the new owner (if financed)
Insurance policy is activated
Keys and documents are handed over

Closing happens in a single day, but weeks of preparation precede it.

FAQ

Who drafts the MOA?

Typically the buyer's legal counsel prepares the draft, the seller's side revises, and the broker coordinates. The Saleform template is used as the base with project-specific additions and amendments.

How big should the deposit be?

Industry practice is around 10%. Below that (5%) signals weak commitment to the seller; above that (20%+) feels like excessive risk to the buyer. 10% is the balance point.

Where is the deposit held?

Never directly in the seller's account. It sits in a neutral escrow account — usually the buyer or seller broker's escrow, sometimes a jointly appointed legal counsel. It is released to the seller at closing; returned to the buyer if the survey fails.

Does the MOA automatically terminate if the survey fails?

Only if the MOA contains a "subject to satisfactory survey" clause. Without it, the buyer has no right to walk away. This is why the clause must be in the MOA from the buyer's perspective.

Which language should the MOA be signed in?

In cross-border transactions, English is the standard. If buyer, seller and vessel are all Turkish, a Turkish-language contract is feasible — but switch to English if a flag change is planned.

Talk to us about your project: let us plan the MOA negotiation, financing process and closing flow together. Reach out via the contact form.