Yacht Charter Contracts: Key Terms Explained
- Kayla Anderson
- 4 days ago
- 10 min read
When planning your first yacht charter, understanding the contract is essential to avoid unexpected costs and ensure a smooth experience. These agreements cover rental terms, financial details, guest limits, and logistics. The two main contract types - MYBA Terms and Caribbean Terms Inclusive (CTI) - offer different pricing models and inclusions. Here's a quick breakdown:
MYBA Terms: Flexible, "plus all expenses" model. Base fee covers the yacht and crew, while additional costs like fuel and meals are paid via an Advance Provisioning Allowance (APA), typically 25–40% of the base fee.
CTI Terms: Simplified, higher base fee that includes meals, basic fuel, and standard services. Extras like premium drinks and additional fuel are charged separately.
Key clauses to review include security deposits, cancellation policies, and force majeure terms (e.g., for weather disruptions). Gratuities for the crew (5–15%) are customary but not included in the fee. For destinations like the Virgin Islands, consider hurricane season risks and local navigation rules. Always review your contract carefully and consult your broker for clarity.
Types of Yacht Charter Contracts
When it comes to yacht charters, there are two main types of contracts to consider. Each offers a different approach to costs, services, and flexibility. Let’s take a closer look at the MYBA Terms and Caribbean Terms Inclusive (CTI) agreements.
MYBA Terms (Mediterranean Yacht Brokers Association)
With MYBA terms, the base fee covers the essentials: yacht hire, crew wages (including their meals), and insurance. However, other costs - like guest meals, drinks, fuel, berthing fees, and communication expenses - are billed separately. To manage these additional expenses, charterers provide an Advance Provisioning Allowance (APA), which typically ranges from 25–30% of the base fee (and can go up to 40% for some itineraries). Any unused funds from the APA are refunded at the end of the charter.
"MYBA terms is best understood as a 'plus all expenses' contract... the contract allows an 'À la carte' approach to services." – Chris Caswell, Writer
This setup offers flexibility, allowing guests to customize their experiences. For example, you can choose where and how to dine or decide on the fuel usage based on your itinerary.
Caribbean Terms Inclusive (CTI)
On the other hand, Caribbean Terms Inclusive (CTI) contracts take a more bundled approach. The fee includes yacht hire, crew, insurance, three meals a day, and about four hours of cruising fuel daily. That said, premium beverages, extra fuel, additional communications, and berthing fees are charged separately.
CTI contracts are ideal for those who prefer a straightforward budget, especially if most of the trip is spent onboard. It simplifies planning since meals and basic cruising fuel are already accounted for.
Key Differences Between MYBA and CTI Contracts
Here’s a breakdown of how these two contract types compare:
Feature | MYBA Terms ("Plus Expenses") | Caribbean Terms Inclusive (CTI) |
Primary Region | Worldwide / Mediterranean | Caribbean |
Guest Meals | Charged separately at cost | Included (3 meals per day) |
Fuel | Charged separately for yacht & toys | Included (typically 4 hours per day) |
Pricing Model | À la carte / Variable | Mostly All-Inclusive |
Payment Structure | Base Fee + APA (25–30%) | Higher Base Fee with minimal extras |
Berthing/Dockage Fees | Charged separately | Generally extra |
Choosing the Right Option
Your choice between these contracts depends on your travel plans and personal preferences. If you like dining ashore and want more control over provisioning, MYBA terms might be the better fit. But if simplicity and predictability are more your style, CTI contracts offer a more inclusive package - perfect for those who plan to stay onboard most of the time.
Key Contract Terms and Clauses
Getting familiar with the details of your yacht charter contract is essential for avoiding unexpected costs and managing your budget effectively. Building on the contract formats mentioned earlier, here’s a closer look at some of the key financial and operational clauses you should understand.
Charter Fee and Advance Provisioning Allowance (APA)
The charter fee covers the rental of the yacht, crew wages and meals, basic water toys, and insurance costs. On top of this, you’ll need to budget for an Advance Provisioning Allowance (APA), which typically ranges between 25% and 40% of the charter fee.
"The Advanced Provisioning Allowance (APA) is essentially an operating expense account for your charter. Think of it as a pre-funded budget that the captain uses to cover all variable costs during your trip." – Epic Yacht Charters
The APA is used for variable expenses like fuel (for the yacht, generators, and tenders), food, drinks, dockage fees, port charges, communications, and laundry. The captain keeps detailed receipts for all expenditures. The percentage of APA can vary depending on the type of yacht and the itinerary. Typically, the APA is due 30 days to eight weeks before your departure. To avoid over-provisioning, be sure to specify your preferences - especially for high-cost items like vintage wines - when filling out your charter forms.
Security Deposit
Many contracts require a refundable security deposit, usually around 50% of the charter fee. This deposit serves as protection for the yacht owner against potential damages during your trip. Once the yacht is inspected and confirmed to be in good condition after your charter, the deposit is refunded.
Cancellation and Force Majeure Policies
Cancellation policies differ depending on the contract. If you cancel and the yacht owner is able to rebook the charter, you may receive a refund of any remaining funds after deducting applicable expenses.
Force majeure clauses are designed to protect both parties in the event of unforeseen circumstances like hurricanes, pandemics, war, or mechanical breakdowns. These clauses often allow for a full refund in such situations. Some contracts include special addendums, such as those related to COVID-19 or hurricanes, which may allow penalty-free cancellations or rescheduling under specific conditions - like a named storm approaching within 48 hours of departure.
"Force Majeure includes, but is not limited to: Acts of God, natural disasters, pandemics, war, terrorism, strikes, government restrictions, or mechanical breakdowns that could not reasonably have been foreseen." – Worth Avenue Yachts
It’s also wise to invest in specialized Trip Cancellation and Travel Insurance to cover emergencies that your charter contract might not fully address.
Charter Period and Itinerary Flexibility
Your contract will outline the exact charter period, including the start and end dates, times, and intended ports of call. While most charters are booked for a week, shorter or longer durations can often be arranged. Although the itinerary is pre-planned, weather conditions and sea states may require adjustments. For safety reasons, the captain has the final say on route changes, but the crew will work with you to recommend alternative destinations if needed. Throughout the trip, the captain and crew will keep you informed about any changes to the itinerary or excursions, ensuring your preferences are considered.
Crew and Gratuities
The charter fee includes a professional crew - typically consisting of a captain, chef, deckhands, and stewards - who handle navigation, yacht maintenance, hospitality, and guest services.
Gratuities, however, are not included in the charter fee. Tipping is a customary practice in the industry, with American crews generally expecting around 15%, while European crews may be satisfied with tips ranging from 5% to 10% for a week-long charter.
"The superyacht industry is a service-based industry at its core... tipping them for a job well done is customary practice on a yacht charter." – Editorial Team, YachtCharterFleet
Gratuities are usually handed to the captain at the end of the charter, who will distribute them equally among the crew, including behind-the-scenes staff like engineers. If carrying large amounts of cash isn’t convenient, you can often arrange to deduct the tip from your APA or have it held in escrow by your charter broker. The final tip amount should reflect the level of service you’ve received, ensuring the crew is recognized for their efforts. Understanding these terms will help you navigate your charter contract with confidence and clarity.
What's Included vs. Extra Costs
Understanding what's covered in your yacht charter agreement can save you from unexpected expenses and help you plan your trip more effectively. The differences between MYBA and CTI contracts can play a big role in determining your overall costs.
MYBA vs. CTI: What's Covered
MYBA contracts follow a "plus all expenses" model. The base fee covers the yacht, crew wages, crew meals, and insurance, but additional costs like food, drinks, and fuel are billed separately. On the other hand, CTI contracts bundle many daily expenses into a single fee, which typically includes three meals per day and fuel for about four hours of cruising. Here's a side-by-side comparison of what each contract type includes and what might cost extra:
Item | MYBA Terms | CTI Terms |
Yacht & Crew | Included | Included |
Meals & Beverages | Paid via APA | 3 meals per day; standard bar included |
Fuel | Paid via APA | Included (typically 4 hours per day) |
Water Toys/Equipment | Included | Included |
Premium Drinks | Paid via APA | Extra charge |
Harbor/Dockage Fees | Paid via APA | Often extra |
With CTI contracts, you may still need to pay for extras like premium spirits, vintage wines, champagne, or fuel if you exceed the included cruising hours. It's a good idea to review your contract carefully to understand the fuel limits and confirm what's included in the "standard bar." This is especially important in destinations like the Virgin Islands and Caribbean, where CTI contracts are more common. Knowing these details will help you budget more accurately and avoid surprises during your charter.
Virgin Islands Charter Considerations
Planning a charter in the Virgin Islands involves unique factors that can influence your contract and overall experience. Being aware of these local specifics, especially when it comes to weather risks and navigation rules, is key to ensuring a smooth trip. Below, we break down how these elements can impact your charter.
Hurricane Season and Rescheduling
The Caribbean hurricane season runs from June 1 to November 30, with peak activity in August and September. This period often prompts specific cancellation or rescheduling clauses in Virgin Islands charter agreements. Many charter providers include terms for weather-related cancellations. For instance, Virgin Charter Yachts outlines:
"In the event that the Company has to cancel any portion of the charter due to severe weather or warnings of severe weather, a credit for the unused portion of the total charter fee will be issued."
Some companies also offer rescheduling insurance - usually around $200 per charter - which allows you to apply funds toward a new booking within 24 months. Additionally, hurricane addendums may allow you to reschedule if a named storm is forecasted to affect the area within 48 hours of your charter's start date. These provisions are typically included in contracts to protect both the charterer and the provider.
Travel insurance is highly recommended during hurricane season, as many agreements provide credits for future use instead of cash refunds. A real-world example from 2024 highlights this flexibility: a charterer from Texas, "RayDoc", shared how their provider quickly adjusted their itinerary due to Tropical Storm Beryl, showcasing the adaptability of experienced local companies during unpredictable weather events.
Local Navigation and Charter Experience
Weather isn’t the only consideration - local navigation rules also play a big role in shaping your Virgin Islands charter experience. For instance, cruising is allowed only between one hour after sunrise and one hour before sunset. Additionally, certain areas, such as the reefs around Anegada Island, Herman Reef, The White Horse, and Horseshoe Reef, are strictly off-limits. If you plan to cross between the U.S. and British Virgin Islands, customs and immigration clearance is required.
Partnering with professional companies like LuxcharterYacht ensures you’re well-prepared. They provide clear pre-departure briefings on safety, navigation, and potential hazards. Their chart briefings highlight restricted zones to help you avoid accidents, while system briefings cover onboard essentials like generators and water systems. These operators also stay up to date on Virgin Islands maritime laws, including USCG licensing and environmental regulations, ensuring your trip runs smoothly and that you have access to prompt assistance when needed.
Conclusion
This guide has shed light on the essentials of yacht charter contracts, breaking down key terms to help you embark on your journey with confidence. Whether you're navigating MYBA's "plus all expenses" approach or the Caribbean's more inclusive CTI terms, understanding your agreement is crucial to protecting your investment and ensuring a smooth charter experience. A well-constructed contract anticipates potential issues, offering reassurance to both charterers and yacht owners. This is especially important for charters in the Virgin Islands, where seasonal and navigational factors demand extra care. Use our yacht charter destination finder to explore other regions with similar considerations.
Take the time to review every clause before signing - paying close attention to terms like the Advance Provisioning Allowance (APA), cancellation policies, and any regional-specific addendums. If anything seems unclear, seasoned yacht charter brokers can help untangle the legal jargon and ensure the terms are balanced for both parties.
Choosing a reliable provider makes all the difference. Experienced companies are well-versed in the nuances of various contracts, local regulations, and seasonal factors like hurricane clauses. They’ll provide a transparent breakdown of all costs, from the base fee to VAT and gratuities, making the process straightforward and stress-free. Once your contract is signed, use our yacht charter packing list generator to prepare for your trip.
FAQs
What’s the difference between MYBA and CTI yacht charter contracts?
The main distinction lies in how expenses are managed. MYBA contracts operate on a "plus-all-expenses" basis. This means the base charter fee covers the yacht, its equipment, crew wages, and their meals. However, extras like guest food, fuel, docking fees, and utilities are billed separately through an Advance Provisioning Allowance (APA). On the other hand, Caribbean Terms Inclusive (CTI) contracts take an "all-inclusive" approach, bundling most costs - such as provisions, fuel, and berthing - into one upfront payment.
MYBA contracts are commonly used for larger yachts in the Mediterranean, offering flexibility to customize provisions but requiring careful monitoring of additional expenses. Meanwhile, CTI contracts, more prevalent in the Caribbean, simplify budgeting by eliminating separate charges, making them a convenient option for those who prefer straightforward pricing.
What is the Advance Provisioning Allowance (APA) in a yacht charter, and how does it work?
The Advance Provisioning Allowance (APA) is a prepayment - typically between 30% and 50% of the charter fee - collected before your yacht trip. This amount is entrusted to the yacht's captain and is used to cover various expenses during your journey. These can include fuel, food, drinks, dockage fees, communication costs, and any specific requests you make while onboard.
Once your trip concludes, the captain will present a detailed breakdown of how the funds were spent. If there’s any remaining balance, it will be refunded to you. On the other hand, if the expenses exceed the APA, you’ll be billed for the extra amount. This system simplifies managing onboard costs, letting you focus entirely on enjoying your luxury yacht adventure.
What should I know about cancellation policies and force majeure in yacht charter contracts?
When going through a yacht charter contract, paying close attention to the cancellation policy is crucial. Most contracts require written notice, often submitted via email, and the amount of notice needed usually depends on the yacht's size. For instance, smaller yachts might need a minimum of 48 business hours' notice, while larger yachts (over 100 feet) often require up to 5 business days. If you cancel late, you’ll likely forfeit the entire charter fee unless specific exceptions - like severe weather - apply, allowing for a reschedule. Be sure to check if rescheduling comes with additional fees or if there are unique rules during holidays.
The force majeure clause is another vital section to review. This clause addresses what happens in the event of unexpected disruptions - such as hurricanes, government travel restrictions, or other uncontrollable circumstances - that prevent the charter from taking place. Typically, these clauses free both parties from their obligations and may allow for a refund or rescheduling without penalties. Make sure you understand which events are covered, what documentation might be required, and how to notify the charter operator. Having a clear understanding of this clause can help protect your booking and avoid any unwelcome surprises.
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