Cancelling a Yacht Charter: What You Get Back, and What If the Owner Cancels

March. Ten weeks before a 7-night charter in Greece. Eight guests.

The first instalment is paid. The second is not yet due.

One couple has to drop out. The rest of the group is wavering.

The organiser asks her broker one question.

What do we lose if we cancel?

The broker does not answer from memory.

The broker opens the signed contract and reads the clause.

The short answer

• What you get back depends on how many instalments have fallen due when you cancel, and on whether the owner can let the yacht again for those dates.
• Under the standard MYBA charter agreement (2017 version), Clause 11 sets this out. It is not a flat forfeit in every case.
• If the owner cancels for a reason that is not force majeure, Clause 9 gives you a full refund plus liquidated damages of 25%, 35% or 50% of the charter fee, depending on how close the charter is.
• Cancellation and curtailment insurance is not included in the contract (Clause 16(d)).
• A cancellation counts when it is in writing, so put it in writing.

Your own contract governs. Clause wording differs between versions and contract forms, so ask your broker to show you the clause.

When you cancel

Clause 11 of the MYBA charter agreement (2017 version) works in steps.

• If you cancel before the final instalment falls due, the owner may retain the first instalment.
• Once later instalments have fallen due, the owner keeps all the instalments due at that point.

That is the starting position. The timing of your cancellation against the payment schedule decides which line applies.

There is a second part.

The owner has to try to let the yacht again for your dates. If the owner does, the net proceeds are credited to you. The net figure is after commission and the cost of re-letting. The aim is that the owner ends up with the same net amount as under your original agreement.

If the week does not let again, you carry the cost.

Provisions already bought for your charter, and delivery fees already used, are charged to you unless they can be refunded or transferred.

This means the answer to “what do we lose” is a range. It depends on the date you cancel, on the payment schedule in your contract, and on the market for that week.

Reschedule before you cancel

Ask about moving the dates first.

A different week, a smaller group or a different yacht can sometimes be agreed with the owner. It is not a right under the form, so it is a conversation. Your broker can have that conversation with the management on the day you ask.

Where the owner agrees, you avoid a cancellation altogether. Where the owner does not, you are no worse off for having asked.

If you are thinking of cancelling, tell your broker as early as you can. A longer runway gives the owner more time to let the week again, and that is the part that can come back to you in credit.

When the owner cancels

An owner can cancel. The owner sells the yacht, a refit overruns, or something else gets in the way.

Clause 9(d) and 9(e) of the MYBA charter agreement (2017 version) cover cancellation by the owner before the charter.

• If the cause is force majeure, you get back everything you paid, without interest.
• If the cause is not force majeure, you get a full refund plus liquidated damages.

The liquidated damages depend on how much notice you had.

• 25% of the charter fee, if the owner cancels 30 days or more before the charter.
• 35% of the charter fee, if it is more than 14 and fewer than 30 days before.
• 50% of the charter fee, if it is 14 days or less before.

Clause 18(a) defines force majeure as a cause beyond the reasonable control of the owner, the crew or the charterer. It includes storms, fog, government acts and a major mechanical breakdown beyond the crew’s control.

The same clause says crew changes and shipyard delays that do not come from those causes do not count as force majeure. So an owner who cancels because of a crew change or an overrunning refit does not get the force majeure outcome from this clause.

Whether a particular event is force majeure is often the real question. Your broker asks management for the facts in writing, and a technical report can be requested where a breakdown is claimed. That is covered on the breakdown page.

What insurance does and does not do

Clause 16(d) of the MYBA charter agreement (2017 version) states that neither charterer’s liability insurance nor cancellation and curtailment insurance is included.

If you want that cover, you buy it yourself, and you buy it before you need it.

Policies differ a great deal. Some cover named reasons only. Some are sold as “cancel for any reason” cover, which usually has its own conditions on timing and on the share it returns. Read the wording, and ask your broker for the names of the policy types that clients commonly use.

Insurance for medical costs, evacuation and personal effects is a separate point. The contract suggests you carry your own.

Caribbean contracts use different forms, often with a 24-hour breakdown threshold and their own complaint deadlines; your broker will show you yours.

Put it in writing

A cancellation counts when it is written down and sent.

A phone call starts the conversation. An email or message with the date, the charter dates and the yacht name gives it a time stamp.

Your broker helps you word it, sends it to the right party, and keeps a copy on file. Then the retention figure, any re-letting credit and any refund can be tracked against a date on record.

What your broker does

• Answers the same day and always tells you when you will hear next.
• Reads the signed contract with you and shows you the clause that applies.
• Puts your request, whether to cancel or to move the dates, to the yacht’s management in writing the same day.
• Helps you put your notice in writing on time, so your rights under the contract stay protected.
• Pushes the owner for specifics, such as re-letting efforts, a credit on a future charter or a written statement of what has been bought for your trip.
• Keeps separate problems separate. A payment question does not hold up a charter issue.
• Keeps you updated until the money side is closed.

How the instalments and balance move is on the payments page. Questions before you book are on the pre-booking page. All the situations are on the hub page.

Questions people ask

Can I cancel a yacht charter and get my money back?

Possibly part of it. Under the MYBA charter agreement (2017 version), it depends on the instalments due when you cancel and on whether the owner lets the yacht again. Your broker reads your signed contract with you.

What if the owner cancels my yacht charter?

If the cause is not force majeure, Clause 9 of the MYBA charter agreement (2017 version) gives a full refund plus liquidated damages of 25%, 35% or 50%, depending on notice. If it is force majeure, you get back what you paid, without interest.

Is a crew change force majeure?

No. Clause 18(a) says crew changes and shipyard delays that do not come from the listed causes do not count as force majeure.

Is cancellation insurance included in a charter?

No. Clause 16(d) says cancellation and curtailment insurance is not included. If you want it, you buy it separately.

Is it better to reschedule than to cancel?

Ask first. The form does not give you a right to move dates, so it depends on the owner. Your broker can raise it the same day.

Does a phone call count as cancelling?

Put it in writing. A dated message or email gives a clear record of when you cancelled.

Ask early, and ask in writing.

Planning a charter? Start with our yachts, or see what to have ready before you talk to a broker. More guides like this one are in our Knowledge Base.