Maryline Bossar: Hi everyone and welcome back to Full Displacement. This is the Current Yachts Podcast and we're here today to chat with Chris Anderson. is with Robert Allen Law and it's one of the firm that worked together with the IYBA, that is the International Yacht Brokers Association, to craft and draft the documents that a lot of yacht buyers and sellers have seen or will see as part of their transactions and dealings with brokered boats. Without further ado, welcome back Amanda and welcome Chris. Chris Anderson: Thank you. Good to be here. AMANDA: Thank you, Marilyn. We're happy to be here today. Maryline Bossar: And we've prepared some really dense questions for Chris. I'm hoping that you're ready for this conversation. It goes pretty in depth, this is super important, as you all know by now, the devil's in the detail. And think Chris will help kind of shine that light on some of the portions of these documents. And today we're going to talk more specifically about the purchase and sale agreement so that you understand as a layperson, a buyer or a seller, what are some of these ⁓ know, technicalities behind the verbiage that was chosen and what to look for in a purchase and sale agreement. Before we get started, I'd love to hear a little bit more about you, Chris. How did you join that law firm? How did you choose yachting? are you a boater yourself, Chris? Chris Anderson: Well, so my uncle had a 44 foot Viking back in the 1980s. He kept it in Atlantic City, New Jersey. And so we'd go down and spend the weekend on the boat. And it was definitely the highlight of the year whenever we did it. it was 44 feet back in the 80s. That was a huge boat back then. now it's the size of some of the tenders I work with. it's a... AMANDA: Yep. Chris Anderson: Times have changed, I'd say for the better. yeah, so I am now the owner of two kayaks, which I love. But that's the extent of my current boating I love it. I love the industry. I joined Robert Allen Law almost directly out of law school. I went to law school at University of Miami, Go Canes! And I joined as a corporate attorney. And one our clients was Bertram Yachts, ⁓ which was a big sports fish based in ⁓ Miami. And they actually manufactured boats ⁓ in Miami. Many people remember on Miami so we started, ⁓ Bob was working with Bertram Yachts. Bertram Yachts was acquired the Ferretti Group. We went on to represent them in the United States. They acquired Allied Marine. And from there, we grew into ⁓ really of the largest law firms in the US and really the world that works in yachting ⁓ So ⁓ my primary area, ⁓ while I started off of representing ⁓ the manufacturer side, I'm almost exclusively buyers and sellers and some banks as well. So what I do. I help people buy and sell boats and try to them out of trouble. AMANDA: And Chris, I know you're here to explain the purchase and sale agreement to us today, but you also have expertise in tax advantages. Is that correct? Chris Anderson: Well, I know a lot and I know enough to be dangerous. We have a tax attorney on staff or we can recommend a tax attorney. the tax law it to boating is its own beast, So certainly we clients a tax attorney to in... AMANDA: Okay. Chris Anderson: conjunction with a maritime attorney such as me because the boat needs to be able to charter and you know there's a lot of as you guys know there's a lot of requirements needed for boat to ⁓ be able to charter particularly US waters which is one of the requirements to claim bonus depreciation and taxes. AMANDA: Yeah, absolutely. So that's just another side thing that you can contact Chris for in the future if you needed Chris Anderson: Happy to help. Maryline Bossar: Actually one of the things that we wanted to cover today is the key differences between what we and use most in our current practice of representing buyer, sellers Current Yachts the IYBA purchase and sell agreement and compare that to the MYBA the memorandum AMANDA: you Maryline Bossar: And those are slightly different and we're gonna go through those now to really fully understand may be more favorable in a particular situation for a seller or or a buyer. So the first question I have in this area is time ⁓ is the essence. Can you explain this to us Chris? Break it down in plain English for our audience and how it's in that MYBA agreement but in the IYBA? purchase and sale agreement. Chris Anderson: Absolutely. And this is one of the many differences between the two contracts, but it's an important one. And it's really something that the IYBA forms committee thought a lot about before we decided to not include the time is of the essence provision. So a time is of the essence provision means that a deadline is a deadline. There's no wiggle room. There's no outs. There's potentially, you know, there's a force majeure. which is, if there's a fire or something like that, then, you know, then that could be wiggle room. But absent something like that, if you don't meet the deadline under the contract, then you're out of luck, right? You've you're in default at that point in time. So the IYBA does not. IYBA International Yacht Brokers Association. It's international. Brokers Association based in Florida, but works across the world. say the IYBA PSA and PSA means IYBA Purchase and Sale Agreement. So the IYBA Purchase and Sale does not include a time of the essence clause. And the reason why is that the forms committee the job ⁓ of this agreement is to get boats ⁓ sold. right, bought and sold, right? purpose of the agreement is not to try to trip up buyer and create a lawsuit that the seller has now has a right or the buyer now has a right to sue the other party, right, because of a technical default. you it be double edged sword, it can help in certain situations to have the... Time is of the essence clause and other circumstances really doesn't make any sense. IYBA took the position that on average, let's get both sold, don't include Maryline Bossar: My is most real estate transactions, for example, ⁓ a time is of the essence ⁓ scenario, which actually not the case then in the of, let's say, the average boat sale using that IYBA PSA. So that's a key difference for people understand it. It doesn't have the same sense of urgency and it has a little bit more leeway. in yacht sales under that PSA from IYBA. Chris Anderson: Yes, yeah. Certainly, boats require a little bit more flexibility sometimes. Sometimes you need to get the boat to the Bahamas. slow getting there. If you don't get there by the delivery time, then you don't want to have the blown up because of that technicality. AMANDA: So that's a real world scenario saying, okay, the boat needs to be surveyed by this date, but a weather, a reason prevented the boat from to the haul out yard. And of course you don't want to jeopardize the crew or the ship in the delivery there to get it there by an arbitrary date that says if it's not, ⁓ deal is dead. Is that one of the cases where this is important or ⁓ Chris Anderson: Yeah, absolutely. So in that case, you know, if there's damage the boat, like I said, there's there's what's called the force majeure provision that that exempts performance in the event of know, an act of God, you know, outside of the control of the Right. So that would probably be make more sense there. you know, it just takes some it takes some time. You're missing a crew member. You know, then that's where the time of the essence clause and ⁓ not one really allows for some flexibility. so in life examples, ⁓ I've been both sides of this issue, right? And, like I it's the sword that cuts both ways. one example, I was representing a A boat was in Hong The seller was in Hong Kong. American buyer. ⁓ had the funds in our trust account. We them 24 hours closing. And we had a MYBA MOA there. And that's the member of Mediterranean Yacht Association, Memorandum Understanding. So under the MOA, there's a is of the essence clause. And so the wire wasn't hitting, the wire wasn't hitting, were time zone differences. I didn't sleep for 24 hours because of the fact that there was a time of the essence clause there. certainly would have had arguments, the fact that we did wire the funds well before the deadline. Our bank was saying it wasn't in our Their bank was saying it wasn't in their account. the time of essence clause certainly added a lot of stress on my end that closing. I wish I had been dealing with the IYBA at that point. But on the other side, I a buyer here in the States, really pretty straightforward American seller as well. But the seller was represented by an attorney who I will not name, but the seller completely blew past the closing deadline. right, there was a closing date. seller's attorney didn't respond for the week before closing. ⁓ And so was the closing date and we're asking, well, where the bills sale? Where's the paperwork in order to transfer title to this boat? And we didn't have anything. ⁓ you can still seller in that case, but it's the seller has the right to cure essentially because of the time of essence problem. So they said, so that's exactly what the attorney service the day later. He says, no time is over the essence clause. ⁓ we still have a deal. you know, and we're, we're here, your bills of sale. We're going to close. And so my client wasn't happy with that situation, he'd already had a, captain lined up. He'd had a insurance lined up, you he was paying the per diem costs of yacht ownership, but he didn't have a boat, so he was, he was angry, but ultimately, the, IYBA contract got the, the boat sold. AMANDA: Right? And that's the main goal. It's just in how, how much do you want to certain parameters around things? And each one of these contracts does and does not put these parameters around. One of the ones we ran across just recently was the deposit deadline. Basically a delay in that. Can a delayed be ground for termination the IYBA contract? Chris Anderson: So yes, it can. ⁓ the IYBA there's a little blank. It allows the parties to fill in how many days after the contract is signed ⁓ that ⁓ the has make the deposit. And if they don't fill in date there, then it's three days after the contract was signed. has to wire in the If the buyer does not make that deadline, then the seller have right to default ⁓ the buyer. The seller also prohibit a sea trial and survey from ⁓ forward. ⁓ has a claim against the buyer the amount of the deposit that was not paid plus fees. So the idea here, again, the forms committee thought a lot about this one and we talked a lot about this one. And the idea was, ⁓ we want under the contract. We wanna make sure that we have real buyers ⁓ that we're working with here. So they tried to put a lot of teeth into it. You know, there's no time of the essence clause. So, if there's a one to two day, delay there, then, you can still default the seller, but they have, they have the right to, the buyer, they have the right to cure. Maryline Bossar: Sure. If I translate this in everyday terms, what you just said to us Chris is, you know, with the understanding that maybe a wire transfer takes an extra day to clear an account, it is actually quite reasonable and in fact possible for that seller to have claim to that unpaid deposit plus attorney's fees for a signed PSA that didn't come with any deposit. In other words, you can't just go around signing PSAs and not sending deposits because you're going to be in trouble as a buyer. You got to be real. You got to like send the money across and not sending money doesn't just void the contract. puts you on the line. Correct? Chris Anderson: Absolutely. That's the idea. Yeah. Maryline Bossar: Thank you for clarifying this. AMANDA: Yeah, the smaller contracts that we're working with, know, the people will sign a PSA and then just be like, I never sent the deposit too bad. Now, of course, the attorney's reason going after them for damages is is one thing that you have to choose. OK, do we want to go down this road? in the instance where a deposit, 10 percent deposit has already been cleared ⁓ then the rest of the money doesn't show up, ⁓ where the contract in the IYBA says that there's every right that seller keep that 10 % deposit if the rest of the contract doesn't move forward. is this in the other contract, the MYBA contract? Chris Anderson: So the, the Meeba contract, it sets the deposit, You know, under under the IYBA, you have the right to select the amount of the deposit, right? It's, it's but the, ⁓ Meeba says ⁓ it's 10%, right? And you have make that within business days of, ⁓ of when the contract was signed. The MYBA contract has less teeth in this provision than the IYBA. So MYBA contract says that if the buyer put up deposit, the seller still has the to the agreement, but the seller can only go after buyer for its out-of-pocket costs, right? So attorney's fees, anything, which are low typically at that point. at that point of the transaction. they don't have the right to go after the deposit itself, right, or the amount of the deposit itself. The other thing that the MYBA differs is that the seller can terminate the purchase and agreement, which obviously terminates right to do a sea trial and survey, but it specifically allow seller to the buyer from going through with the survey and see trial, right? the only way the seller can move is to terminate the contract, right? don't have the right to prevent the buyer from this survey and see trial they terminate the contract. AMANDA: and that has to be in writing. Chris Anderson: Yes, yeah, yeah, you'd have to provide written notice of there. AMANDA: Great, yeah. Interesting. Maryline Bossar: And another key difference too that you've highlighted several times because you've sharing knowledge in the industry about those key differences, right? Between the IYBA PSA and the MYBA MOA, Memorandum of Agreement. another thing very is the acceptance process for a vessel. And can you perhaps talk us through that so we understand the key differences between the two agreements? Chris Anderson: Absolutely. So I have I've been a lawyer for 20 years and I still have to go back to my notes every time I look at the MYBA acceptance because it's it's so complicated and it changed a little over the years. So anyway, the IYBA is straightforward. The buyer and the seller have the to pick a date by which the buyer must AMANDA: ⁓ Yeah. Chris Anderson: either accept or reject the vessel. And that's called the accept reject date. Prior to that, the buyer has the right to inspect the vessel, do whatever it wants terms of ⁓ and sea trials, can elect not to do survey or sea trial. The buyer can do a personal walkthrough of the vessel. And if buyer doesn't like ⁓ the smell the boat, doesn't like the color of the carpet in the master state room, the buyer has the right to cancel. unless the buyer affirmatively accepts the before the accept-reject deadline, then the contract deemed terminated. Maryline Bossar: Under the IYBA purchase and sale agreement, the buyers have broad discretion to reject the vessel. I was wondering if you've seen cases where has been used ⁓ strategically you're like, OK, that is an interesting way to apply this. Do you have examples of things that have been either surprising or creative in your experience that you could share with us? Chris Anderson: Yeah, so of the things that is permissible under the IYBA PSA to put in an offer on more than one boat, right, for a buyer to put in an offer on more than one boat. The IYBA is an contract, and so it allows the buyer to walk away for any reason up to the, unless it accepts the boat, right? So we have seen examples of. Buyers putting in offers on more than one boat, they play the offers against each other. I ⁓ think that this is ⁓ practice. choose your boat and work on that one, but it's discouraged typically in the industry, but it is technically possible. The key there obviously though, as we discussed is you got to make a deposit on each of those contracts. Otherwise you can't just have one for... for two contracts, needs to be two separate deposits for each of the contracts that you put out there. Maryline Bossar: That's a really good reminder actually. Wait up. You can't just pretend you have a deposit. It has to be for that particular vessel. So very good point. And we get asked the question a lot as to whether or not somebody should or could two different boats. ⁓ perhaps, Amanda you can speak to that. Chris Anderson: Hehehehe AMANDA: you Chris Anderson: Yeah. AMANDA: Yeah, my encouragement there is choose your boat like you said, Chris and work on one and not. try to say, which boat can I get for the cheapest price? thing is, ⁓ you put the contingency in there of personal inspection, you're to have a personal inspection. And if you don't like the smell of the boat, like you said, you could reject it. But once you put contingency of survey and sea trial, you're on the hook for paying for that. And that is to the ⁓ seller as well you're willing and ready to move forward. So it's just one protection both ways. Chris Anderson: Absolutely. and I'd also say, you know, that that that differs from the M.Y.B.A. M.O.A. I'd never a put in than one offer on on more than one vessel MYBA So we didn't really get into that. But the MYBA M.O.A. it almost presumes that once a buyer signs the that the is going to move forward with the ⁓ and buy the Right? bar for a buyer getting out of the MYBA MOA is much higher a IYBA PSA. So under the MYBA MOA, the buyer and seller, choose a date by which the survey and sea trial must be completed. The buyer first does a sea trial of the vessel. And then they have 24 hours upon completing sea trial to either accept or reject the vessel at that point. That's That's it. yeah, and it's, if they miss that deadline, then they're deemed to have purchased the boat, right? That's a deemed acceptance. So it's their boat. Absolutely. Yep. Yep. Maryline Bossar: 24 hours, that's it. So it's a default acceptance with a MYBA agreement. Okay, so you got to know what you're doing. If you're looking a boat, make sure you know which agreement you're working with and ask all the questions, especially if it's MYBA because the outs are very limited, it sounds like, post survey, right? So that 24 hour expiration means you're going to closing. Chris Anderson: Very limited. AMANDA: you Chris Anderson: They're going to closing. then after the sea trial, then do a survey, ⁓ a survey. And after the condition survey, buyer then has days in order get out of the deal but the bar is much higher. not just, they can't just get out for any reason. They actually have to have a surveyor certify that there's a defect. in the operational integrity of the vessel or its systems or machinery. frankly, as we know, of surveyors find a lot of issues, right? You so it's not necessarily that hard to meet that bar, but I've been in the position where the seller able to argue, no, that's not a defect, know, that doesn't affect the operational of the ⁓ systems, To use our prior example, the color of the carpeting at that point, that's not a defect, right? under the MOA. It's also not a defect if you don't like the smell of the boat, you know, so you're, that's, that's your boat. Unless your surveyor certifies that there's real defect with the operation of of the vessel. So it's a, it. Maryline Bossar: Yeah, that's very interesting. I didn't realize how strict it is, but I can see how for certain vessels, certain assets, makes sense to go that route ⁓ fair point. Chris Anderson: Mm-hmm. Yeah. AMANDA: And another clear difference is in the IYBA PSA, the buyer doesn't assume risk to the closing. His is the % deposit held in trust that he can get back at any point before that accept / reject date. Whereas MYBA how does that differ? You said basically once they sign that PSA, it's like they're the boat. Where's the difference there as far as risk goes? Chris Anderson: Yeah, so back to our previous example. first of all, you have sea trial. ⁓ then you miss that 24-hour deadline after the sea trial. That's your boat, right? Then you go to the survey. ⁓ You have seven after the survey to present that certificate from your surveyor there's an actual defect in the systems. ⁓ if you don't that within seven days of the end of the survey. It's your boat. You deemed accepted it. Right. there's always the possibility that ⁓ at point, the seller ⁓ say, ⁓ know, this not a defect. Right. You we've had that we've had ⁓ it was a ⁓ was a 50 dollar deal. Right. And we had a we had a seller saying, no, that's that's not an actual an actual defect. And, know, and that means, you know, the buyer had Maryline Bossar: Sure, I could see that. Chris Anderson: 10 % deposit down, you that's a lot of money that's on the line just of way that the MYBA sets that Like I it has the presumption that once you sign the contract, you're gonna buy the boat unless have a really good reason not to. Maryline Bossar: again, when we go back to risk and coverage in this case, if something happens to the boat between the survey and the closing, that coverage still the seller's insurance, correct? Chris Anderson: Yeah, yeah. So under both contracts, risk of loss remains with the seller until delivery occurs, ⁓ Until closing. Maryline Bossar: That's what I wanted to clarify based on the way Amanda worded her question. I want to make sure that that was And do both agreements then prohibit the sellers from using the boat ⁓ the survey has been completed? Chris Anderson: Yes. Yeah. Yeah. both agreements have that have language. No personal use after the survey. ⁓ I mean, that's something you let your seller know they're they're signing up for because we constantly have sellers that are surprised by by that provision. I have an anniversary party that I want to want to throw the boat. You know, and It's the day before ⁓ Yeah. Maryline Bossar: Farewell party, no such thing. Chris Anderson: Exactly, Maryline Bossar: And based on the differences you've highlighted so far, where would you say most brokerages draw the line as far as which agreements to use? Does it matter more based upon region and location of the vessel or more so really it's a price point threshold? What do you see? Chris Anderson: So ⁓ I do see both. I'd say primarily it is based on The ⁓ IYBA ⁓ historically a Florida organization. IYBA contract is more commonly used the and Caribbean transactions. The MYBA MOA has been around longer. And for that reason, more accepted in waters. ⁓ And just due of organization, the Yacht Brokers Association, you tend to larger done on the MYBA MOA rather than the IYBA But in my experience, changing. you'll see a lot of European lawyers now who actually mark up, do a heavy of the MYBA MOA and bring provisions closer that of the IYPA, just because it's a little bit more clear and less convoluted than the MYBA MOA. Maryline Bossar: Okay, yeah, thanks for sharing that. mean, there's really very few people we could ask this question, so we really appreciate those insights on that particular point, so super, super valuable. Chris Anderson: Absolutely. AMANDA: So let's go to the next portion of the contract that covers inventory and exclusions. Obviously, a lot of the times people are looking at the listing online and they see the listed there. But there sometimes exclusions, buyers' personal effects, that Sea Bob that they want to bring with them to the next boat doesn't convey with the sale. Inventory seems like a small detail but can cause big disputes down the road. What is the most common issue you've seen here regarding inventory and exclusions? Chris Anderson: this is of the areas that we see kind of most disputes, I would say, in a transaction. for background, the ⁓ IYBA agreement says in terms of everything that was on the boat or in the listing agreement, if something's listed in listing agreement, that's on the boat at the time that the purchase and is entered into included with the sale of the boat unless seller an list. And the seller has five days from contract signing to deliver an exclusions list buyer of items that are excluded from the purchase. The MYBA and on the other how they handle it is you have everything, related to the boat or used with the boat is included. And then the parties sign a, I think the seller has seven days to, I don't have to check that, but the seller has seven days to deliver an inventory to the buyer. And then the parties go ahead and they initial that inventory signing the agreement. So there's lot of room for issues here and one of the main ones that we see is certainly high value items. there are tenders or chase boats that are excluded, it's one thing just because of the the contracts are set up. It's assumed a tender or boat would be included in the purchase, but then you deliver an exclusions list five days later. ⁓ that excludes and it's possible that buyer is super angry at that point in time because he thought he was paying to include tender and it turns out it wasn't included. So for both, when I represent both buyers and sellers, I always specify in the contract, when we're getting started, what tenders are included, jet skis, if anything, are included, any artwork or sculptures that are included. ⁓ The ⁓ other areas where this kind of becomes a little tricky is, for example, offsite storage units. I don't know if you guys have dealt with that but so under the IYBA PSA, it's only items are aboard the boat that transfer. AMANDA: Yeah. Chris Anderson: Under the MYBA, it's everything that's used in connection with the boat that transfers, right? So the IYBA offsite storage items don't transfer unless you specifically write into the PSA or into your acceptance that those items are included. Under the MYBA those items are included unless you actively them, right? And neither deals what happens with the lease, right? So there's always the question, do you have to... Do you just leave them there? Do you have to bring all those items to the boat? So that's always something again that I try to address upfront. And then the last area is leased items. for example, primarily in Europe, it's pretty common to see IT systems and AV systems that are leased. means that as the seller, need to make sure that that IT system is excluded the purchase, right? Otherwise you've committed to transferring somebody property, right? You don't know, you as a seller don't own IT equipment, you So you can't agree transfer that to the buyer, you know? ⁓ And then the is gonna be really angry at closing that... IT system isn't included in the purchases. They can't send an email until they have a replacement in place. So those are some of the issues that we see. And like I said, I like to get out ahead of it. That's my policy. Section of the IYBA an additional term section, right? ⁓ Either included in there ⁓ or attach an addendum ⁓ clarity. AMANDA: Yeah. Chris Anderson: prevents conflict. Maryline Bossar: Another thing. AMANDA: Yeah. Maryline Bossar: that we do that's pretty standard at current yachts. Whenever we take on a listing, we actually as part of our listing agreement have a custom addendum that our sellers and it's both a owner certification ⁓ condition disclosure. So we make sure that this is included and shared with the buyer when they present their offer. ⁓ there is not going to be further negotiation on those terms. And that point as well, of course, the list of exclusion, inclusion. it's very, transparent, very clear. don't wait till the last minute to find out, wait we forgot to disclose that we make our disclosures and owner certification from the and we find that that's most successful. AMANDA: Yeah, getting in front of it is the best advice you had. And that comes for us when you sign the listing agreement with us, ⁓ we can make this apparent to any ⁓ buyer to the table saying, ⁓ yeah, that code zero that is the storage unit, it's not on boat right now, but it will be by the time the survey is there, so it can be yours. Or by the way, this Seabob or this ⁓ Lyft electric foil, Chris Anderson: Absolutely. Maryline Bossar: Correct. Chris Anderson: Exactly. AMANDA: that you thought came with the boat. It's not, it's going on the next charter with the owner. So we have to be very specific on these things. Chris Anderson: Yeah, yeah, and prevention is worth a pound of cure. Is that the saying? I don't know. Something like that. An ounce of prevention, pound of cure. Maryline Bossar: Yeah, exactly. AMANDA: something yeah Maryline Bossar: And I think too to coach our clients as well. You don't want to tempt questions negotiations on items. So just remove the items off the boat prior to any showing to avoid any temptation to negotiate or request something be added with the boat. Hey, will you throw this in? No, ⁓ I'm not anything in. So that would be my recommendation too for for sellers. Chris Anderson: Absolutely. Best practice. AMANDA: into this one about your choice of law and dispute resolution venue. The IYBA which we choose to use with Current Yachts, offers multiple arbitration venues, and which way the parties want to choose, come a dispute. What are the pros and cons of arbitration in places like London versus Port Lauderdale, would you say? Chris Anderson: well, to back up the IYBA includes a default arbitration in front of the International Yacht Arbitration Council, IYAC is the term there. And ⁓ IYAC is the, ⁓ my the only arbitration forum the world dedicated to yachting, right? There are a number of maritime arbitration associations out there, but they deal with big cargo ships and cruise vessels. Yachting not what they do. And as we know, yachting is very different from commercial shipping. And so love the fact that the IYBA PSA defaults to IYAC I think it's smart to have yachting disputes arbitrated by arbitrators that know what know about So that's first. IYBA also ⁓ for a choice of, say the parties want arbitration. know, they can also go to the courts. They can also do London Maritime Arbitration Association, which is kind of a very old and ⁓ traditional arbitration association based in London. They that option. But IYAC arbitration is the default. And then though based on where the live, wanted the purchase and sale agreement to a document could work in a bunch of ⁓ different ⁓ scenarios. If you have a buyer and a who overseas, then sometimes they may prefer Monaco arbitration or London arbitration. The IYBA allows all choices, either Fort Lauderdale, London, or Monaco, with Fort Lauderdale the I'll say in my practice, we're signing an IYBA PSA, ⁓ 99 % of the time, parties just agree to the default provisions, which are again, Fort Lauderdale and IYAC arbitration. AMANDA: we recently ran into an issue with an IYBA contract signed with London Maritime Law and it caused some ⁓ for us and some headaches, we eventually took care of it. Chris Anderson: you're talking about going overseas for arbitration or court, can be expensive. any litigation can be very expensive, but particularly if you have to travel overseas, have to have your experts overseas. That was the idea of the IYBA PSA to give as much flexibility to the as possible. AMANDA: Yeah. Chris Anderson: You know, I'll contrast that with the MYBA And the MYBA MOA only has LMA arbitration. that's where they have the, the English barristers. You have the Queen so it's very formal. be very, very, very So that's the only option under the MYBA MOA is LMAA arbitration in London. so for had had we represented American signed MYBA MOA, The seller was also an American seller. Right. But the two parties and the boat was in Caribbean. parties had to go over to London to arbitrate their dispute. Right. was was really a nonsensical outcome. The buyer and the seller actually lived in the same town in Florida, ⁓ they had to go all the way over to London arbitrate their So that's again why the IYBA wanted to allow a little bit more flexibility there. AMANDA: Wow. Maryline Bossar: But it's a very important call out because again, for our listeners here, remember the offer will be presented by a buyer or their buyer's agent and you need to be very careful as the seller together with your broker to ensure that the law, the jurisdiction matches your interest. because if there is a checkbox or an information field in a field that you missed, it could have very serious consequences. So there's anything you take home from this conversation today, it is when you receive a PSA, ensure you know exactly what it says because again, too important to ignore and actually to miss because it's kind of buried in there, right? Chris Anderson: Absolutely. Yeah. Maryline Bossar: Point taken. so switching gear a little bit. Wanted to you when advising a first-time yacht buyer, which agreement do you typically lean towards and why? And I think I kind of know the answer, but if you could summarize for us, make sure we really drive this one home. Chris Anderson: Yes, well, full disclosure, I am biased. I ⁓ part the forms committee. was a young lawyer on the forms committee. So I did a lot of the draft. I did a lot of the drafting. A lot of the words that are on the page are written by me. Right. So I have a ⁓ it's my a little bit. But, you know, but it was very much a group effort. But but I I worked hard on it. And so I am partial to the IYBA. Maryline Bossar: Okay. It's your fault. ⁓ Chris Anderson: sale agreement. But I also think for good reason. I think it's a better contract. I think it's written more clearly. I think there's less loopholes and less traps that buyers sellers can fall into. I think it encourages getting a done rather than having a series of ⁓ potential pitfalls where a buyer is a boat that they don't want or the seller can also end up in a lot of inadvertent trouble under the MYBA as well. I just it's a better agreement for buying and selling yachts Maryline Bossar: Okay, very good. And then for experienced buyers or larger yachts, would you say that then let that geography drive more of the decision based on what you told us earlier? Chris Anderson: Well, as you mentioned earlier, the choice of contract is often driven by the buyer. And on these big deals, and on really any deal, don't want to ruin a deal because you insist upon another form of contract. You want to work with your buyer. Maryline Bossar: Right. That's a very good point, yep. Chris Anderson: or vice versa, if the seller insists upon MYBA and you've submitted an IYBA you want to kill the deal over a form of So you can work both certainly, more experienced is going to a little more with how transactions work. But it's still at the same time. I don't know about you guys, but it seems to me that when these otherwise brilliant businessmen to buy boats, minds just go out the window. It's a and not a multi-million contract, which it really ⁓ AMANDA: And unfortunately, Chris, what we're seeing now with the of AI, people are taking these contracts and then them with their own AI and demanding these things. this is another that I caution in both the and seller relationship. If a person is being stickler when it comes to the wording of contracts, just be aware. that this person may be more litigious than the next. And if that's the way you're going into a contract, it's just ⁓ little flag, not red flag particularly, but a flag that's in the back of my mind of, all if this person is being a stickler on ⁓ every of wording here, going through every document and saying his chat GPT is, you know, smarter than IYBA who has been doing this for years and years and years. That is a caution in my book that make the seller or buyer aware of right away and saying this person, if you enter an agreement with them, maybe more litigious than the next ⁓ and Chris Anderson: And it's amazing the amount of false and bad information that's out there. I get summaries and addenda all the time that are generated by AI. when we're up against, know, when we have a council on the other side that is, that are yacht lawyers, right? We, you know, it's a small industry. We all know each other, and things really seamlessly, ⁓ and then below that, you have lawyer on the other side who, doesn't practice. maritime law, to do your job and theirs. then certainly they don't even have a lawyer, they just have AI, your job just became that much bigger. AMANDA: They just said AI. Yeah. It's trouble. It's like, okay, now you're trying to find and a lot of the times I just go back to the default of, hey, this contract was written by industry professionals to cover both sides And I am not comfortable changing the specific details of this contract unless it's, going to blow up the deal. And I can't tell you. Maryline Bossar: Well, another- AMANDA: Yeah, that we've to that statement. Go Maryline Maryline Bossar: Another comment on this is just simply people aren't reading. They're coming back and making requests for things that are already addressed. And we have to educate because sometimes, to be honest, their brokers read that document in a while either, and they don't realize it's in there. And so ⁓ really encourage all brokers, of course, when you get some verbiage back from a client, before you flip it off to the other side of the table, take a look at it. Is it really necessary? Is that going to make things more complicated? So. That will be kind of what I've learned from that one example where somebody was trying to rewrite the rules and we're like everything you wanted is covered in here. Anything that you want separate, we can make a request, but the client ultimately has a choice. And I wanted to bounce back on something that Chris said, which is put yourself in the seller's shoes. When a seller receives an offer and that seller is in Florida and he receives two otherwise identical offers in terms with two different agreements, which one are they more likely to choose and prefer? Probably the one that they are more familiar with, the IYBA, which perhaps is more common that perhaps they're a broker based in Florida, might be more familiar with. there's no right or wrong answer. It's all about what makes sense for that particular deal and so I really appreciated that comment from Chris on saying hey what do you think is most likely to you know to win so think about that as well as the terms Chris Anderson: And to your point, make sure you understand what you're signing and read it thoroughly. Read it, yeah. Maryline Bossar: Read it! AMANDA: Yeah. Maryline Bossar: That's really important. Again, goes back to real estate, right? When you sell a house or you make an offer in a house, you read the terms and you ask your real estate agent all these questions. Do the same with your yacht broker. That's why we're here. Ask us, don't ask AI. ⁓ if we have a clarifying question, we go to Chris, we go to other specialists for their particular lane. Everybody stays in their lane. We're here to make the deal go through, support our client's interest. AMANDA: Yeah. Maryline Bossar: And we don't have the answer everything, but when we need support, we know ⁓ to turn. And so for that, thank Chris, for everything you've done for IYBA and that particular PSA. This is what we use mostly because we have most of our inventory here ⁓ in US and the Caribbean, but it's working. You just need to know what it says. And then if you have questions, know who to ask. Chris Anderson: Absolutely. Maryline Bossar: So thank you for watching this episode of Full Displacement with Chris Anderson today from Robert Allen Law. We're going to put the contact for Chris in the description of this video. There'll be a link to our marine directory. This is where Current Yachts gathers all of the contacts that we have made in the industry for vetted professionals that can help you as a buyer or as a seller. again, thank you, Chris, for your time. We look forward having you. in the future on the podcast. If more questions arise, so please post comments below and we will see you ⁓ the water. Fair winds. AMANDA: What is the one area of a boat transaction that is the most contentious in your experience as a yacht lawyer? Chris Anderson: Inventory and exclusions. AMANDA: what is the one clause in the purchase and sale agreement that everyone should read twice? ⁓ Chris Anderson: It seems simple, but the answer is the delivery location. ⁓ have profound economic effects on buyer and the seller. And if you don't get it right, could subject to ⁓ AMANDA: What is the deadline to reject a vessel under the MYBA contract? Chris Anderson: it's 24 hours after the sea trial and days the survey. AMANDA: And between the IYBA and the MYBA contract, which one is more flexible for cross-border deals? Chris Anderson: the IYBA.