When you buy or sell a yacht in the United States, the transaction is governed by a formal legal document called a Purchase and Sale Agreement, commonly referred to as a PSA. This is not a handshake deal or a simple bill of sale. It is a binding contract that defines the rights and obligations of both parties, the role of the brokers, the conditions under which the sale proceeds or falls apart, and what happens to everyone's money at each stage of the process.
For most buyers going through this for the first time, the PSA arrives after the initial excitement of finding the right vessel and agreeing on a price. It can look intimidating. It is a dense, legally precise document with specific timeframes, defined terms, and clauses that have real consequences if you miss or misread them. Understanding what it says before you sign is one of the most important things you can do to protect yourself in the transaction.
This guide walks through how yacht purchase agreements work, what the key elements are, and what each clause in the IYBA Purchase and Sale Agreement actually means in plain terms. The IYBA PSA is the standard contract used in the US yacht market and the document AK Yachts uses with its clients. A separate section covers the MYBA agreement and when it is used instead.
What Is a Yacht Purchase Agreement?
A yacht purchase agreement is a legally binding contract between a buyer and a seller that governs the purchase of a brokerage (pre-owned) vessel. It covers the purchase price, the deposit, the conditions under which the buyer can inspect and accept or reject the vessel, the closing process, the transfer of title, the role of the brokers, and how disputes are resolved if something goes wrong.
Yacht purchase agreements are different from simple boat bills of sale in several important ways. They contain inspection and survey contingencies that give the buyer a structured window to evaluate the vessel and walk away if needed. They define escrow arrangements for the deposit. They address title warranties, encumbrances, and what happens if the vessel is damaged before closing. And they establish a legal framework for resolving disputes, including which jurisdiction's law applies and whether any claim goes to arbitration or court.
The difference between a yacht PSA and a standard vehicle purchase contract is also worth understanding. A yacht is a more complex and higher-value asset than a car, it can be moved across international waters, it may have maritime liens attached to it, and its condition can change materially between the time of inspection and the time of closing. The PSA is designed to manage those risks for both parties.
The Two Industry-Standard Agreements: IYBA and MYBA
Most professional yacht transactions in the US and internationally are conducted using one of two industry-standard purchase agreements. Which one is used depends primarily on where the vessel is located, the flag it is registered under, and the nationalities of the parties involved.
The IYBA PSA: The US Market Standard
The IYBA Purchase and Sale Agreement for Brokerage Vessels is the standard contract used in the United States and across the Caribbean. The International Yacht Brokers Association (IYBA), formerly the Florida Yacht Brokers Association, developed this form specifically for the US market. It is governed by Florida law by default (though parties can elect English law), and disputes default to binding arbitration in Fort Lauderdale under the International Yacht Arbitration Council (IYAC). AK Yachts uses the IYBA PSA for its transactions.
The MYBA MoA: The European Standard
The MYBA Memorandum of Agreement is the standard contract for yacht transactions in Europe and the Mediterranean. It is governed by English law and provides somewhat different buyer and seller protections compared to the IYBA form. The comparison between the two is covered in detail later in this guide.
| Aspect | MYBA MoA (Europe/Mediterranean) | IYBA PSA (US/Caribbean/Florida) |
|---|---|---|
| Issuing body | MYBA (Mediterranean/Worldwide Yachting Assoc.) | IYBA (International Yacht Brokers Assoc., formerly FYBA) |
| Governing law | English law | Florida law (or English law by election) |
| Dispute resolution | LMAA arbitration, London | IYAC arbitration, Fort Lauderdale (or LMAA by election) |
| Buyer's right to reject | Sole discretion after survey - no reason needed | Buyer may reject for any reason before Accept/Reject Date; silence = rejection |
| Default acceptance rule | Silence = acceptance (buyer must act to reject) | Silence = rejection (buyer must give written acceptance) |
| Deposit standard | Typically 10% of purchase price | Typically 10% of purchase price |
| Warranty position | More detailed seller representations | AS IS sale; all warranties disclaimed at Closing |
| Financing contingency | May be included | Financing may be added as a contingency satisfied before surveying |
| Typical geography | Europe, Mediterranean, global superyachts | US, Caribbean, Central/South America |
| Best suited for | European or international parties; non-US flag yachts | US-based transactions; US-flagged or US-located vessels |
The IYBA Purchase and Sale Agreement: Clause by Clause
The following walks through each substantive paragraph of the IYBA PSA (June 2026 revision) in plain language. The clause reference numbers correspond to the actual document. The table at the end of this section provides a quick-reference summary.
Paragraph 1: What You Are Actually Buying
The definition of 'Vessel' in the IYBA PSA is broader than just the boat itself. Unless specifically excluded, the sale includes all gear, machinery, equipment, furniture, fuel, consumables, and any registered or unregistered tenders, toys, and appurtenances on board or listed in the vessel's specification as of the date of the agreement.
The seller is required to provide an Exclusions List, identifying anything they are keeping, within five days of the Effective Date or before the Accept/Reject Date, whichever comes first. If the buyer accepts the vessel, they are deemed to have accepted the Exclusions List as well. This means you need to read the Exclusions List carefully before acceptance. A tender you saw during your walkthrough, a specific piece of electronics, or fuel on board may or may not be included depending on what is on that list.
Paragraph 2: The Deposit
The deposit is due within three business days of the seller signing the PSA (or within the number of business days the parties agree to fill in). It is held in the Selling Broker's escrow account, not paid directly to the seller. The seller may decline to allow the survey and inspection to proceed until the deposit has cleared into escrow.
The deposit of 10% is the typical standard, but sometimes negotiated with larger values. Also, an agreed escrow agent may substitute for the selling broker, typically an attorney. The deposit is held against the purchase price, meaning it is credited toward the balance due at closing, not an additional cost on top of the purchase price.
Paragraph 3: The Survey and the Accept/Reject Decision
This is the most consequential clause for buyers, and the one most worth understanding in detail.
The buyer has the right to conduct a trial run and survey before the Accept/Reject Date. Key mechanics:
- Buyer selects the surveyor. Not the seller, not the broker. The surveyor works for the buyer. For more on how to find and use a marine surveyor, see our guide on what a yacht survey involves.
- Buyer pays all survey costs including haul-out, dry dock, and subcontractor charges.
- Seller pays running expenses for the trial run and bears the risks associated with it.
- Buyer may accept or reject for any reason before the Accept/Reject Date. There is no requirement that the rejection be based on survey findings.
- Silence is rejection. If the buyer does not deliver written notice of acceptance on or before the Accept/Reject Date, the vessel is deemed rejected. This is the opposite of the MYBA agreement, where silence is deemed acceptance.
Upon completion of the survey and trial run, the seller may not use the vessel for any purpose other than moving it to the Delivery Location pending closing. If the buyer rejects (or is deemed to have rejected), the deposit is returned and the agreement terminates. If the buyer accepts but attaches conditions to that acceptance, this is treated as a proposal to amend the PSA, not a binding acceptance.
Paragraph 4: Closing
Closing is the moment ownership transfers. It occurs at the Delivery Location on the Closing Date, simultaneously with payment of all funds due to the seller and delivery of all documents necessary to transfer good and marketable title.
The seller must deliver the vessel at the Delivery Location in the same condition as it was immediately after the survey and trial run, normal wear and tear and fuel consumed in transit excepted. This is an important protection: if the vessel is damaged between the survey and closing, the seller bears responsibility under Paragraph 7.
Before closing, the buyer or their representative may conduct a non-invasive walk-through and have divers inspect the hull to verify condition. This pre-closing inspection is not a second survey. It is a verification that nothing material has changed since the survey was completed.
Commissions, storage fees, insurance, repair costs owed by the seller, and any lien payoffs are deducted from the sale proceeds before the remaining balance is disbursed to the seller.
Paragraph 5: The Brokers and Dual Agency
This paragraph establishes which brokers are involved and clarifies their obligations. In a transaction where the Listing Broker and the Selling Broker are different companies, each represents only their own client: the Listing Broker represents the seller, and the Selling Broker represents the buyer. Neither owes a duty to the other party.
If both functions are handled by the same brokerage, the agreement requires the parties to consent to dual agency. In that situation, the broker may share information about the vessel's value or condition with both parties, but cannot disclose to the buyer that the seller will accept less than the asking price without the seller's consent, or vice versa.
The commission is paid by the seller by default, unless the parties agree otherwise in writing. Working with a dedicated buyer's broker ensures you have representation that works in your interest, even though the commission structure is on the seller's side.
Paragraph 6: Seller's Representations and Title Warranty
This is one of the most important paragraphs for buyers. The seller represents and warrants that they will transfer good and marketable title, free and clear of all debts, liens, maritime liens, security interests, encumbrances, excise taxes, customs duties, and any other applicable taxes.
At least two business days before closing, the seller must deliver:
- Evidence of title (typically the USCG Abstract of Title or state title)
- Proof of payment or removal of all encumbrances, or confirmation that any outstanding liens will be paid in full at closing
- A personal guaranty and indemnification from the seller covering their title representations
- If the seller is a legal entity (LLC, corporation, trust), corporate authorization documents, a power of attorney, and proof of good standing
The title warranty in the IYBA PSA means the seller is personally on the hook if a lien surfaces after closing that was not disclosed or paid off. This is meaningful protection, but it requires enforcing a claim against the seller after the fact, which is why a thorough title search before closing is still essential.
Paragraph 7: Risk of Loss and Force Majeure
The seller bears the risk of loss or damage to the vessel right up until closing. If the vessel is damaged after the survey is complete and before closing, the following applies:
- If repairs cost less than 5% of the purchase price and can be completed in fewer than 30 days, the seller repairs the damage and the buyer proceeds with the purchase
- If damage is more extensive, either party may terminate the PSA, with the same outcome as if the buyer had rejected the vessel (deposit returned, agreement terminates)
The Force Majeure clause covers events genuinely beyond either party's control: acts of God, pandemics, hurricanes, civil unrest, piracy, and similar. If a force majeure event delays the closing by more than 60 days, either party may terminate.
Paragraph 8: Default
Buyer default and seller default are treated very differently.
If the buyer defaults (fails to pay the balance at closing, or fails to execute required documents), the deposit is retained by the seller and the brokers as liquidated damages. After any expenses incurred on the buyer's behalf are paid first, the remainder is split 50/50 between the seller and the brokers. The buyer gets nothing back.
If the seller defaults, the deposit and any other money paid by the buyer is returned on demand. The buyer also has the right of specific performance, meaning they can ask a court or arbitrator to compel the seller to actually complete the sale. The IYBA PSA explicitly recognizes that specific performance is appropriate because the vessel is unique. Additionally, the seller owes the brokers their full commission even when the seller is the defaulting party.
Paragraph 9: Sales and Use Tax
Sales or use taxes on the purchase are the buyer's responsibility. The buyer pays these to the Selling Broker at closing, and the buyer indemnifies both the seller and the brokers against any liability for these taxes. Sales tax treatment of yacht purchases varies by state, and where you take delivery, where you register the vessel, and where you primarily operate it can all affect the applicable tax. Florida, for example, caps use tax on vessels. This is an area where a tax professional familiar with marine purchases should be consulted before closing.
Paragraph 10: The AS IS Disclaimer
This paragraph is one of the most significant in the entire agreement for buyers. At closing, the buyer is deemed to have accepted the vessel in its AS IS condition. The seller and the brokers disclaim all warranties, expressed or implied, including fitness for any particular purpose and merchantability.
This does not mean the buyer is unprotected. The seller's title warranty in Paragraph 6 still applies. And the buyer has the survey and trial run to evaluate the vessel before acceptance. But once the buyer signs the PSA and closes without rejecting the vessel, they cannot come back after delivery claiming the seller misrepresented the condition.
This is exactly why the survey, the trial run, and a thorough pre-closing inspection are essential steps, not optional formalities.
Paragraph 11: Financing Is Not a Contingency
The IYBA PSA does not include a financing contingency by default. The buyer’s obligation to close is not conditional on obtaining a loan. Before a buyer signs a PSA, if a finance contingency is added as an amendment, it typically allows for the buyer to obtain financing approval prior to survey/seatrial. This is a meaningful distinction from residential real estate contracts, where financing contingencies are common. In the US yacht market, the expectation is that buyers have either arranged financing or confirmed sufficient funds before signing the PSA. Our guide on how to finance a yacht covers the options in detail.
Paragraph 17: Governing Law and Dispute Resolution
By default, the IYBA PSA is governed by Florida law, and any dispute is resolved through binding arbitration in Fort Lauderdale under the rules of the International Yacht Arbitration Council (IYAC). The parties waive the right to a jury trial on any claim arising under the PSA.
The parties can elect London arbitration under LMAA rules instead, in which case English law applies. For most US-based transactions, the Florida/IYAC default is the appropriate choice.
If the amount in dispute exceeds USD 100,000, IYAC full arbitration rules apply. Below that threshold, a simplified procedure is used.
IYBA PSA Quick Reference: All 17 Paragraphs
The table below summarizes every substantive paragraph of the IYBA PSA for quick reference.
| Para. | Clause Title | What It Covers |
|---|---|---|
| 1 | Agreement / Vessel Definition | Defines what is included in the sale: gear, equipment, fuel, tenders, toys, and appurtenances on board or listed in the vessel's specification. Seller provides an Exclusions List within 5 days of the Effective Date. |
| 2 | Deposit | Buyer pays the deposit within 3 business days of Seller's signature (or as otherwise agreed). Held in the Selling Broker's escrow account. Seller may refuse to allow survey until the deposit clears. |
| 3 | Survey Option / Accept or Reject | Buyer may perform a trial run and survey before the Accept/Reject Date. Buyer selects and pays for the surveyor and all survey-related costs. Seller pays running expenses for the trial run. Buyer may accept or reject for any reason. If no written notice of acceptance is given by the Accept/Reject Date, Buyer is deemed to have rejected the vessel. |
| 4 | Closing | Transfer of ownership occurs on the Closing Date at the Delivery Location. Seller delivers the vessel in the same condition as after survey, normal wear and tear excepted. Buyer may conduct a pre-closing walk-through and hull dive. |
| 5 | Brokers / Dual Agency | Identifies the Listing and Selling Brokers. If both are the same brokerage, dual-agency consent is required. If different, each broker represents their respective party only. Commission is paid by Seller. |
| 6 | Seller's Representations / Title | Seller warrants delivery of good and marketable title free of all liens, encumbrances, and taxes. Seller must provide title evidence, lien clearance, guaranty/indemnification, and corporate documentation (if a legal entity) at least 2 business days before Closing. |
| 7 | Risk of Loss / Force Majeure | Seller bears risk of loss prior to Closing. If post-survey damage is under 5% of purchase price and repairable in under 30 days, Seller repairs and Buyer proceeds. Greater damage allows either party to terminate. Force Majeure events can extend timelines; if delays exceed 60 days, either party may terminate. |
| 8 | Default | If Buyer defaults (non-payment, failure to close), Deposit is retained by Seller and Brokers as liquidated damages, split 50/50 after expenses. If Seller defaults, Deposit is returned to Buyer and Buyer may seek specific performance. Seller owes commission to Brokers regardless of default cause. |
| 9 | Sales and Use Taxes | Buyer's responsibility. Buyer pays any applicable sales or use tax to the Selling Broker at Closing and indemnifies Seller and Brokers. |
| 10 | AS IS Warranty Disclaimer | The vessel is sold AS IS. Seller and Brokers disclaim all warranties, expressed or implied, including fitness for purpose and merchantability. Buyer's closing is deemed acceptance of the vessel in its as-is condition. |
| 11 | Financing | Buyer's obligations are NOT contingent on financing. Buyer represents it will arrange financing if needed. Brokers make no representations about Buyer's ability to obtain financing. Buyers should have a financing pre-approval before survey |
| 13 | Binding Effect / Future Sales | PSA is binding. Seller cannot sell or enter into contracts for the vessel while PSA is in effect. If parties transact privately within 2 years of PSA termination, Brokers are still owed their commission. |
| 14 | Escrowed Funds | Selling Broker holds Deposit in escrow once cleared. May retain commission before disbursing to Seller. Disputes involving escrowed funds require Buyer and Seller to indemnify Brokers for legal costs. |
| 17 | Governing Law / Dispute Resolution | Default is binding arbitration under IYAC rules in Fort Lauderdale, governed by Florida law. Parties may elect London (LMAA) arbitration under English law. No jury trial. |
Ready to Move Forward on a Purchase? Work with a Broker Who Knows the Process.
AK Yachts uses the IYBA Purchase and Sale Agreement on every transaction. Andy Kniffin CPYB guides buyers and sellers through every clause, every deadline, and every step from deposit to closing. If you have a vessel in mind or want to understand your options, a conversation with Andy costs nothing.
The Transaction Timeline: From Offer to Closing
Understanding the PSA in isolation is useful. Understanding it as part of a sequence is more practical. Here is how the major milestones typically flow in a US brokerage transaction using the IYBA PSA.
Step 1: Offer and Negotiation
Before the PSA is signed, the buyer typically makes a verbal or written offer on the vessel. This is not the PSA. It is a preliminary negotiation that results in an agreed purchase price and terms (including the survey period and closing date). For a thorough overview of what to consider before making an offer, see our guide on what yacht buyers should consider.
Step 2: Signing the PSA and Paying the Deposit
Once the terms are agreed, the PSA is drafted and signed. The Effective Date is the date both parties have signed. The buyer then has three business days (or the agreed number) to wire the deposit to the Selling Broker's escrow account. The transaction does not fully commence until the deposit has cleared.
Step 3: Survey and Trial Run
With the deposit cleared, the buyer engages a marine surveyor and schedules the survey and trial run. The seller makes the vessel available and pays for the running expenses of the trial run. The buyer pays for all survey-related costs including haul-out. The survey must be completed before the Accept/Reject Date.
Step 4: Accept, Reject, or Renegotiate
After receiving the survey report, the buyer has three options: accept the vessel unconditionally, reject the vessel and receive the deposit back, or propose amendments to the PSA based on survey findings (which constitutes a counter-proposal, not an acceptance). Most transactions result in a renegotiation where specific findings are addressed through price adjustments or agreed repairs.
Step 5: Closing Preparation
Once the buyer accepts, the parties move toward the Closing Date. The seller prepares title documentation, lien clearances, corporate authorizations if applicable, and coordinates payment of any outstanding encumbrances. The buyer arranges the balance of funds, confirms insurance will be bound at closing, and coordinates with the lender if financing is involved.
If the vessel requires USCG documentation or state registration in the buyer's name, the documentation process begins at this stage.
Step 6: Pre-Closing Walk-Through and Closing
The buyer or their representative conducts a non-invasive walk-through and can arrange a hull dive before closing. If the vessel is in the agreed condition, closing proceeds: funds are transferred, title documents are exchanged, the Selling Broker releases the balance to the seller (after deducting commissions and any amounts owed), and ownership transfers to the buyer.
What Sellers Need to Know About the IYBA PSA
The PSA protects buyers and sellers, but in different ways. Sellers often focus on the purchase price and underestimate how much the PSA structures their obligations and exposure during the transaction.
Your Title Warranty Is a Personal Obligation
When you sign the IYBA PSA, you personally warrant that you will deliver clear title. If a lien surfaces after closing, you are legally responsible. This means resolving any outstanding loans, storage liens, repair bills, or tax obligations against the vessel before or at closing is not optional. Work with your broker and, if necessary, a maritime attorney to confirm the vessel's title is genuinely clean before you enter into a PSA.
The Vessel Must Be Available for Survey
Once the PSA is signed and the deposit has cleared, you are obligated to make the vessel available for the buyer's survey and trial run as soon as practicable. Delaying the survey can create complications with the Accept/Reject Date and the Closing Date. If you are preparing your vessel for sale, having the boat ready for survey is part of that preparation.
You Cannot Sell to Anyone Else While the PSA Is Active
Paragraph 13 is unambiguous: while the PSA is in effect, you cannot enter into any other contract for the sale of the vessel. And even after termination, if the buyer and seller transact directly within two years, the brokers are still owed their commission. Attempting to work around this obligation creates legal liability.
If You Default, the Commission Is Still Due
If you, as the seller, fail to complete the transaction, you owe the brokers their full commission regardless. This is not a negotiable consequence of default. It is written into the agreement.
Ready to Move Forward on a Purchase? Work with a Broker Who Knows the Process.
AK Yachts uses the IYBA Purchase and Sale Agreement on every transaction. Andy Kniffin CPYB guides buyers and sellers through every clause, every deadline, and every step from deposit to closing. If you have a vessel in mind or want to understand your options, a conversation with Andy costs nothing.
Conclusion: The PSA Protects Everyone When You Understand It
A yacht purchase agreement is not a formality or a hurdle between you and the vessel you want to buy. It is the structure that makes the entire transaction work fairly for both parties. The deposit creates commitment. The survey clause protects the buyer. The title warranty protects the buyer after closing. The default provisions hold both sides accountable. And the dispute resolution framework gives both parties a known path forward if something goes wrong.
The buyers and sellers who have the smoothest transactions are the ones who read the agreement, understand their key deadlines, and communicate openly with their broker throughout the process. The most common problems in yacht transactions, missed deadlines, surprises at survey, financing gaps, title issues at closing, are almost all preventable when the parties go into the PSA with clear expectations.
If you are earlier in the process and still evaluating what vessel to buy or whether ownership is the right move, our guides on used yacht buyer tips and how to sell your yacht cover those decisions in detail.
Frequently Asked Questions About Yacht Purchase Agreements
What is a yacht purchase and sale agreement?
A yacht purchase and sale agreement (PSA) is a legally binding contract that governs the purchase of a brokerage (pre-owned) vessel. It defines the purchase price, deposit terms, survey rights, closing conditions, title transfer requirements, broker roles, and dispute resolution procedures. In the US market, the standard form is the IYBA Purchase and Sale Agreement for Brokerage Vessels.
Is a yacht purchase agreement legally binding?
Yes. Once both parties have signed the IYBA PSA and the buyer has paid the required deposit, the agreement is legally binding. Both parties have specific obligations, deadlines, and consequences for non-performance.
What deposit is required on a yacht purchase agreement?
The IYBA PSA does not specify a fixed deposit percentage. The amount is standardized at 10% of the purchase price, but sometimes negotiated in the case of larger transactions. The deposit is held in escrow by the Selling Broker and is credited toward the balance due at closing.
Can a buyer back out of a yacht purchase agreement?
Yes, within the survey and trial run period. Under the IYBA PSA, the buyer may reject the vessel for any reason before the Accept/Reject Date by delivering written notice of rejection. If rejected properly, the deposit is returned. If the buyer does not give written acceptance by the Accept/Reject Date, they are deemed to have rejected the vessel. After acceptance, withdrawing from the transaction without cause results in forfeiture of the deposit.
What happens if the survey finds major problems?
The buyer has several options after receiving a survey report. They can accept the vessel as-is, reject it and receive their deposit back, or propose a renegotiation of the purchase price or specific repairs as conditions of acceptance. Proposing conditions constitutes a counter-proposal under the IYBA PSA, not a binding acceptance, and the buyer retains the right to accept unconditionally or reject before the Accept/Reject Date.
What is the difference between the IYBA PSA and the MYBA MoA?
Both are industry-standard yacht purchase agreements, but they operate in different markets and under different legal frameworks. The IYBA PSA is governed by Florida law and is the standard for US, Caribbean, and Americas transactions. The MYBA MoA is governed by English law and is standard for European and Mediterranean transactions. Key practical differences: under the MYBA, buyer silence after the survey deadline is deemed acceptance; under the IYBA, buyer silence is deemed rejection. Also, the IYBA sells the vessel AS IS at closing, while the MYBA includes somewhat broader seller representations.
Does the IYBA PSA include a financing contingency?
No. By default, the buyer's obligation to close under the IYBA PSA is not contingent on obtaining financing. If the buyer cannot secure financing after accepting the boat, the seller can enforce the contract and the deposit may be forfeited. Buyers who need financing should arrange at minimum a pre-approval before signing the PSA. Our guide on how to finance a yacht covers how to approach this.
Who pays the broker commission in a yacht sale?
Under the IYBA PSA, the seller is responsible for paying the broker commission, unless the parties agree otherwise in writing. The commission is deducted from the sale proceeds at closing before the balance is disbursed to the seller. Even if the sale does not close due to seller default, the seller still owes the brokers their full commission.
What documents does the seller need to provide at closing?
At least two business days before closing, the seller must provide satisfactory evidence of title, proof of payment or removal of all liens and encumbrances, a personal guaranty and indemnification covering their title representations, and, if the seller is a legal entity, corporate documentation including authorization to sell, good standing certificates, and power of attorney.
