This article is part of a charter special. The contents:
Anyone who has a charter contract ready to sign will usually be thinking more about the beautiful sailing days ahead than about the potential damage and liability risks that they are entering into with the signature. Accordingly, most charterers have little motivation to study the General Terms and Conditions (GTC), which are often pages long and actually printed in unreasonably small print, before signing the contract. What's more, various agencies and fleet operators do not send these to the customer with the first offer, but only once the customer has already decided to book.
As a result, most skippers put their name to the contract even when they have a bad feeling in their stomach. "It'll be fine" is the motto. To be fair, it does in 90 per cent of all cases. But what if you fall into the other ten per cent?
Because there are charter trips that go completely wrong. The trouble usually centres around defects or damage to the boat during the trip, or it's about the deposit.
Other customers are caught cold by exclusions in the hull insurance. For example, if the dinghy and outboard motor are stolen, it is sometimes not the insurance company that has to pay for it, but the customer. And in case of doubt, this may exceed the amount of the deposit, even if the customer has taken out deposit insurance.
Some companies even exclude damage to the sails or hatches from the hull cover - which can quickly mean a total loss with three or four-year-old cloths that can no longer be repaired. The customer is then often asked to pay for the new sail.
In general, it can be said that in many charter contracts the customer tends to be in a worse position than the charter company, and in some it is clearly worse. For example, by reserving the right to exceed the handover time to the customer by four to six hours. This means that the first day of sailing may be cancelled completely. On the other hand, the customer is often subject to drastic penalties if the return is more than one to three hours late.
What to do if a dispute arises?
If a dispute arises with the charter company, a legal dispute is usually not worthwhile for the customer. On the contrary. If the company is based abroad, the dispute must be brought before local courts. However, lawyers, translations and travelling to hearings make this so expensive that the economic risk is often far higher than the value of the dispute. Of course, the charter companies are also aware of this and are therefore usually relaxed about complaints.
Damaged customers cannot demand recourse from the German charter agency through which they booked the cruise. As a rule, they are not legally responsible; the fleet operator is always the opposing party.
Nevertheless, it is often the agents who help their customers out of trouble. Even if it's only by obtaining compensation for them. As an agency, they have a better basis for negotiation with the local charter companies than an individual sailor. This alone is a good argument for going through an established agency when chartering a yacht instead of booking directly with the provider abroad.
Sometimes, however, only public pressure can help. Especially when it comes to contractual clauses that not only penalise a customer, but can also have considerable financial consequences. This is usually due to liability limitations or exclusions hidden in the charter company's general terms and conditions. In the event of major damage, these can quickly run into money.
This was the case for a charterer who went sailing on the German Baltic coast in 2017. After one of his fellow sailors caused expensive damage during a mooring manoeuvre, he settled the matter properly with the charter company: his deposit was retained and the case was settled for both parties.
But not for the charter yacht's hull insurer. The insurer invoked a clause in the charter contract according to which the customer must indemnify the charter company against third-party claims resulting from his charter. In other words, he was supposed to reimburse the insurance company in full for the regulated damage over and above his deposit.
It was only when the customer contacted YACHT that the insurance company backed down and waived its claim "as a gesture of goodwill". The clause would probably not have stood up in court either. But, as I said, which yachtsman would consider going to court if he received a claim from an insurance company?
Bans on running, sailing and night-time driving: Are they valid?
Often there are also prohibitions on leaving the harbour or sailing in the general terms and conditions, which result in the cancellation of insurance cover if they are not observed. For example, many fleet operators prohibit their customers from leaving the harbour in prevailing or forecast winds of 6 or 7 Beaufort. Some skippers may still be able to understand a wind force of seven, but six is the order of the day in some areas, such as the Greek Cyclades during the Meltemi period, and should not be a problem for an ocean-going vessel with an experienced crew.
Anyone who signs something like this must therefore be aware of the risk they are taking when sailing in too much wind - or simply take a harbour day. It's just a shame if you then find yourself under time pressure.
In the Caribbean, on the other hand, night-time sailing bans are very often anchored in the small print, sometimes even with exact time specifications, such as "the use of the boat is limited to 7 a.m. to 5 p.m. daily". Exceptions usually have to be authorised by the fleet operator.
Also typical of the Caribbean: there are often destinations that are quickly declared no-go zones by boat insurers due to too much grounding. But harbours with a lot of swell are also often excluded from the sailing area. Woe betide anyone who has not read their contract thoroughly before setting off! In case of doubt, you are uninsured. This is because the base managers do not always point out the navigation bans.
A different problem exists in Italy and Greece. There, fleet operators point out that the state prescribes a standard contract that everyone has to sign. Although some companies deny this, at least for Greece, these contracts are widespread.
Sometimes, however, they are only presented on site for the customer to sign. And then probably in the local language or at best in an English translation.
A good agency draws its customers' attention to such exceptions and ideally sends them this standard contract unsolicited at the time of booking, at least in English and preferably in German. In practice, however, only a few agencies do this, as the effort involved with hundreds of fleet operators is very high. This is because the charter companies often add their own clauses to the standard clauses.
Per se, Greek and Italian contracts impose a relatively large number of obligations on crews. And there are also downright antiquated regulations, such as the requirement to regularly inform the owner of the yacht about the progress of the trip. In practice, nobody adheres to this anymore. It is therefore all the more regrettable that these framework agreements are not being revised by the local legislators.
Is the deposit a guarantee for a maximum amount?
And it gets even worse. One of the contracts reviewed by YACHT contained the following wording: "The excess per claim is to be borne by the hirer and may differ from the deposit paid." This means that in case of doubt, you are not only stuck with a deposit of 1000 or 2000 euros, but also with an excess of 3000 or 4000 euros or even more, which is included in the hull insurance of the boat.
Protect your deposit with insurance?
Many charter crews avoid the problem and take out deposit insurance. This does indeed provide partial protection, but it does not cover exclusions in the hull insurance either. If in doubt, it makes more sense to take out skipper's liability insurance, especially one that pays out even in the event of gross negligence.
The other alternative, however, would be for the customer to take the trouble to read the charter contracts and general terms and conditions thoroughly and, if in doubt, to insist on an offer with fair contractual conditions from the agency. In this way, potential trouble can be largely avoided right from the start.
Summary of controversial clauses
- Insurance exclusionsIt is not uncommon for dinghies, outboards or even sails to be excluded from the yacht's hull insurance in the general terms and conditions. If the dinghy is then damaged or its engine stolen, which does happen, even a deposit insurance policy will not help; the customer will be asked to pay. Rubber clauses should also be treated with caution, such as the one stating that damage caused by "reckless behaviour" is not covered by the insurance.
- Extended liability of the customer"The landlord's comprehensive insurance does not exempt the tenant from liability for damage not covered by the insurance." If you come across such wording, you should book elsewhere. Especially if it is not clear what kind of damage is specifically meant. If, for example, a charterer had to pay in full for environmental, salvage or consequential damage following damage to the yacht, this could drive him to ruin. Unfortunately, many general terms and conditions contain this or similar clauses.
- Outlet bansItalian charter contracts in particular prohibit sailing "in prevailing or forecast wind forces of 6 Beaufort or more". If you cast off anyway, you assume "full responsibility for all damage caused", i.e. you are sailing without insurance cover! If the latter addition is missing, the clause is less critical. However, it is often unclear whether it also applies to forecast gusts. Above all: In Italy, there is usually no getting round the prohibition on leaving the harbour, as it is standard there. It's best to stick to it.
- Reduced compensation"Refunds will not be made in the event of defective or missing equipment or breakdowns due to technical problems." So no hope of a refund if booked extras are not on board, do not work or the boat has to stay in harbour for a longer repair while underway.
- Unfair handover modalitiesIf a customer returns the yacht too late, this often costs the fee for a complete charter day from one to three hours. After that, it is sometimes many times more expensive. The charter companies, on the other hand, often grant themselves a period of up to six hours in the general terms and conditions for the provision of the yacht, which they may deviate from the agreed handover time.
- Deposit not equal to deductibleBeware of formulations such as "The amount of the deposit may differ from the amount of the excess stipulated in the hull insurance". In this case, the charterer may be liable for damage to the vessel in excess of his deposit.
- Inadequate sat nav equipment"The charter company accepts no liability for damage caused by out-of-date, missing or altered nautical aids such as charts, manuals, plotters, autopilots or radar." If, for example, a skipper runs the ship aground because the paper chart is out of date or the chart chip in the plotter is old, the skipper alone is liable for any damage caused.
