A new build is a three-to-five-year construction project priced in the tens of millions, and the owner who signs on optimism alone pays for it in slipped delivery dates and creeping extras. The contract, not the shipyard's goodwill, is what protects you.
You signed for a 60-metre delivery in the spring of year three; it is now the autumn of year four, the launch has slipped twice, and the invoices for ‘owner variations’ have quietly added several million to a figure you thought was fixed. Nothing about a superyacht new build is quite fixed — not the price, not the date — unless the construction contract makes it so, and most delay and overrun pain traces back to clauses an owner never read closely.
A superyacht is a bespoke industrial project, not a purchase. The delays and overruns that plague new builds are structural, and they recur across yards and flags for the same handful of reasons.
None of these is exotic. They are the ordinary physics of building something unique, which is precisely why the contract has to anticipate them rather than assume they will not happen.
The construction contract is the instrument that turns a shipyard’s promise into an enforceable obligation, and its payment structure is the owner’s principal lever. Superyacht new builds are almost never paid in a lump sum; the price is broken into milestone or stage payments tied to defined points in construction — contract signature, steel cutting, keel laying, hull turning, engine installation, launch, sea-trials and delivery.
The discipline that matters is linking each payment to a verified physical milestone, not to a calendar date or the yard’s say-so. A payment released only when steel is actually cut, or when the engines are demonstrably installed, keeps the owner’s cash roughly aligned with the value built into the vessel. Where payments run ahead of progress — front-loaded schedules that hand the yard money it has not yet earned — the owner carries the yard’s insolvency risk and loses leverage over the pace of work. A well-drafted schedule also names an owner’s representative or classification surveyor as the party who certifies each milestone before funds move, so that ‘done’ is an inspected fact rather than an invoice.
Stage payments expose the owner to a stark risk: money paid into a half-built hull can vanish if the yard fails. The answer, and the clause no serious owner should sign without, is the refund guarantee — a bank or parent-company instrument that repays the owner’s instalments if the yard becomes insolvent or defaults before delivery.
A robust structure has each stage payment covered, from the first deposit onward, by a guarantee from a bank of undoubted standing, callable on the yard’s default with minimal conditions. The weaker versions — a guarantee from the yard’s own thinly-capitalised parent, or one that only bites after protracted arbitration — offer comfort on paper and little in a crisis. Deposits should sit in escrow or against a first-call guarantee, never simply in the yard’s working account. For a build where cumulative payments can reach eight figures before launch, the quality of the refund guarantee is not a technicality; it is the difference between a recoverable setback and a catastrophic loss.
Time slippage is managed through the delivery-date and liquidated-damages provisions, which put a price on lateness so the owner is compensated without having to prove loss. The contract fixes a contractual delivery date, then defines a grace period, after which liquidated damages accrue — typically a fixed sum per day of delay, capped at a percentage of contract price, with a long-stop date beyond which the owner may cancel and call the refund guarantee.
The battleground is what stops the clock. Yards seek broad ‘permissible delay’ and force-majeure wording that excuses slippage caused by owner variations, late owner-supplied equipment, and a long list of external events; owners want that list kept tight and every claimed excuse documented in real time. The table below sets out indicative figures for how these clauses commonly sit — ranges, not quotes, and always subject to negotiation.
| Contract mechanism | Typical range | What it protects |
|---|---|---|
| Liquidated damages, per day of delay | US$5,000–US$25,000 | Owner’s time / running costs |
| LD cap (% of contract price) | 5%–10% | Yard’s exposure ceiling |
| Grace period before LDs accrue | 30–60 days | Yard’s tolerance buffer |
| Long-stop cancellation window | 180–270 days late | Owner’s exit right |
| Refund-guarantee coverage | 90%–100% of paid instalments | Owner’s deposit capital |
The owner who monitors a new build from a distance, trusting the yard’s progress reports, is the owner who is surprised at launch. A superyacht build needs a dedicated owner’s representative — a project manager, often with a resident site team — embedded at the yard to protect the owner’s interest day by day.
Their remit is concrete. They certify milestones before stage payments are released, so money follows real progress. They scrutinise variation orders, forcing the yard to state the price and time impact of each change before the owner approves it, which is the single most effective brake on both overrun and slippage. They inspect quality against specification and class rules, catch defects while they are cheap to fix, and keep an independent record of who caused which delay — the documentation that decides whether a slip counts as owner-caused or yard-caused when liquidated damages are calculated. On a project of this scale the representative’s fee is a fraction of a single month’s delay, and their presence is what keeps the contract’s protections live rather than theoretical.
Delay and overrun cannot be eliminated from a bespoke build, but a disciplined owner can cap the exposure and keep the surprises small. The essential move is to treat the contract, not the relationship, as the safeguard, and to put the right people around it before steel is cut.
Handled this way, a new build’s risks become managed variables rather than open-ended liabilities. The premium for that discipline is small; the cost of skipping it is measured in slipped seasons and unrecoverable millions.
We introduce owners to vetted shipyards through our Marketplace network under NDA, and stand alongside your naval architect and counsel to structure the deal that follows — a stage-payment schedule tied to certified milestones, a first-call refund guarantee, and liquidated-damages and long-stop clauses that actually bite. Tell us the size, the yard shortlist and the timeline, and we help you sign a contract where the delivery date and the price are protected, not merely hoped for.
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Because they are bespoke industrial projects. The main causes are owner variations that change the design mid-build, long-lead components such as engines and custom joinery, subcontractors shared across several yards, and cash-flow pressure on the yard. Most are foreseeable, which is why a well-drafted contract anticipates them rather than assuming they will not occur.
A new build is paid in instalments tied to construction milestones — steel cutting, keel laying, hull turning, engine installation, launch and delivery — rather than in a lump sum. Linking each payment to a physically verified milestone, certified by your representative, keeps your cash aligned with the value actually built and preserves your leverage over the yard’s pace of work.
It is a bank or parent-company instrument that repays your paid instalments if the yard becomes insolvent or defaults before delivery. Because cumulative payments can reach eight figures before launch, a first-call guarantee from a bank of standing, covering each instalment from the first deposit, is the clause that separates a recoverable setback from a catastrophic loss.
They put a fixed price on lateness — typically US$5,000 to US$25,000 per day, capped at 5% to 10% of contract price — so you are compensated without proving loss. Beyond a long-stop date, usually several months late, you can cancel and call the refund guarantee. The negotiation turns on how tightly permissible delays and force majeure are defined.
For a build of this scale, yes. A resident project manager certifies milestones before payments release, scrutinises the price and time impact of every variation, inspects quality against specification and class, and documents who caused each delay. Their fee is a fraction of one month’s slippage, and they keep the contract’s protections working in practice rather than on paper.
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