The clauses of yacht design agreements The clauses of yacht design agreements
When drawing up the yacht design agreements between the ship-owner and the designer,  the parties and their respective lawyers must pay great attention to the... The clauses of yacht design agreements

When drawing up the yacht design agreements between the ship-owner and the designer,  the parties and their respective lawyers must pay great attention to the description  of the design required

by Federico Santini*

When drafting a yacht design agreements, some important clauses should be included. In particular, it is important to clearly set out the type of design and the main features of the yacht that the designer is asked to create, in order to avoid misunderstandings or claims.

Regarding the first aspect, it is best to proceed step by step, starting with the preparation of the concept design. This is a general, big picture design showing how the yacht will be laid out, the exterior design with one or more views of the yacht lines (side view, stern view, bow view, etc.), and the interior design with one or more views of each area of the yacht, presented using renderings and 3D models.

Once the concept design is approved by the owner, normally after several changes and integrations, the designer can move on to the next step, the basic design. This involves developing the concept design to create detailed plans, drawings, renderings and specifications that will allow the builder selected by the owner to produce the shop drawings. It has become standard practice to attach an annex to the agreement with a detailed list of the drawings and designs requested, complete with a description of the design details requested and timing for each drawing.

Regarding the second aspect, the main characteristics of the yacht, the owner will of course provide the designer with their own ideas of the yacht they want to build, in order to allow the designer to meet the owner’s expectations and requirements. This is quite a delicate aspect, as the clearer the owner’s ideas are, and the better they are able to communicate them, the more likely it is that the designer will be able to create a satisfactory design in a reasonable timing. It is therefore a good idea to include in the design agreement, or to attach as an annex, a brief prepared by the owner providing the designer with the necessary input in terms of yacht dimensions, volumes, areas, appearance and use.

Another important aspect to cover in a yacht design agreement is the intellectual property rights and the right to use the design: the owner will obviously want to get the right to use the design for the construction of the yacht by the builder, while the designer will want not only to get paid for the project but also to be officially recognised as the designer of the yacht by both the owner and the selected builder.

Normally, the yacht design agreements specify that all the intellectual property rights relating to the design will remain the sole property of the designer and that, subject to full payment of the agreed design fee, the designer will grant the owner a royalty-free, exclusive, irrevocable, worldwide and assignable licence to use the design, so that the owner can build the yacht according to the design at any shipyard they choose.

The agreement should also specify that the designer authorizes the owner to supply the design deliverables and drawings to one or more builders for the purpose of receiving quotations and proposals for the construction of the yacht, on the condition that the owner signs a non-disclosure agreement with each selected builder, protecting, among other things, the designer’s intellectual property rights.

Another standard clause in design agreements is the designer’s warranty to the owner that none of the design deliverables will infringe the rights of any third party, and a full acceptance of liability by the designer.

* Federico Santini: he is managing partner of the Santini & Partners Law Office in Rome. He is specialized in international law and maritime law, has consolidated experience in the yachting field especially in terms of super yachts transactions, the registration of yachts, international arbitration, insurance issues and tax related . He is a member of the Italian Association of Maritime Law and advisor for the most important law offices and of the international associations. For information or clarifications: [email protected]t

(The clauses of yacht design agreements – – August 2018)

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