Insights & Articles

When purchasing a boat, legal due diligence is crucial to ensure a smooth transaction and avoid potential pitfalls. This process primarily focuses on confirming that the seller has clear legal ownership of the vessel and that there are no hidden charges, such as mortgages or liens, which could surface after the purchase. In this article, we outline the key legal considerations to help buyers safeguard their investment.

Well-drafted agreements for vessel sales are important, especially for larger, technical vessels. While smaller vessel buyers may see these as unnecessary, written contracts simplify legal disputes. Agreements range from basic contracts to detailed forms like the Norwegian Saleform and should clearly outline terms, transaction processes, and dispute procedures, with common provisions as a standard foundation.

The importance of due diligence cannot be overstated; a little bit of time and money spent prior to purchasing a boat should (but not always) save a lot of time, frustration, and money if the boat turns out to be other than advertised. Also, it occasionally uncovers issues that even the owner was unaware of.

In the third article in this series we focus briefly on the second limb of due diligence that should be considered when purchasing a vessel namely, legal due diligence.

Buying a boat (or any major asset for that matter) without undertaking due diligence is exactly like reality shows where the participants either get married or go on blind dates with someone they have never met before. Sometimes things pan out and we are stoked for them, but more often than not we sit glued to the television waiting for the inevitable train-wreck to unfold.