Untangling Pay-First, Pay-If-Paid, & Other Clauses In Yacht Deals

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One tiny word in a marine contract can decide who gets paid and who gets stranded. We unpack the real meaning of pay-first, pay-if-paid, and pay-when-paid in yacht builds, refits, and charters, and trace how P&I club traditions shaped today’s clauses. From owners to shipyards, subcontractors, brokers, and charterers, we map the entire payment chain so you can see where money stalls, why it stalls, and how to keep your project moving when one party hits a cash wall.

We go deep on insurance structure too: deductibles, primary layers, and the often-invisible reinsurance towers that can trigger pay-as-paid delays. You’ll hear how enforcement differs across jurisdictions—why Florida and England often honor these clauses, why France rejects them, and why a quiet New York governing law provision in a yacht policy can wreck a claim even when a breach didn’t cause the loss. Along the way, we share hard lessons from real cases: unpaid subs, insolvent yards with heavy mortgages, charterers arriving to unseaworthy yachts, and banks blindsided by misdirected funds.

The takeaway is practical and immediate. Read for conditional words like if, when, and as. Verify solvency as liquidity, not just net worth. Demand third-party guarantees from entities with real, provable assets. Check recorded liens on yard property, use escrow that protects deposits, and align broker fee splits with clear payment conditions. Above all, plan for collectability before you sign; a courtroom win without a pocket to recover from is no win at all.

If this helped you spot risks in your own contracts, subscribe, share the show with a fellow owner or broker, and leave a review with the clause you’re most worried about. Your question might shape a future episode.

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