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Old 11-05-2015, 20:23   #16
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Join Date: Jun 2009
Location: still in a roll of fiberglass around Cape Town
Boat: Leopard 40 (new model)
Posts: 1,202
Re: Installments for new boats

Quote:
Originally Posted by Stumble View Post
In custom builds this is a pretty common system, even for established builders. The payments are supposed to be for reimbursement of things already done, not prepay,net for the next batch of work.
(snip)

The best way to insure this type of deal is with a performance bond.
(snip)
Performance bonds are very common, and almost every construction project over $1 million it's just assumed.
I worked for Bechtel when I was young. What you say sounds to me more like large construction projects that custom boats. I have followed closely several semi-custom and small-volume boat builds and the payments were ahead of percent complete in situ because builders do not have capital to fund the time between paying suppliers and using the materials. I have not seen a boat builder provide a performance bond. After all, in most cases the financials are such that any sensible insurer would run away.

Scary but real I am afraid.

C

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Old 11-05-2015, 21:13   #17
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Re: Installments for new boats

I seem to recall a buyer ordering a boat recently from a semi- custom Brit builder that had been re-incarnated more than once in it's past, as most manufacturers have. He contracted such that the title of the boat passed to him very early in the build process such that if the company went under (which it did) he had rights to the boat in it's current state. Perhaps one of our lawyers presnt could comment on the feasibility of that these days?
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Old 02-02-2016, 12:09   #18
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Re: Installments for new boats

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Originally Posted by SuzieWong View Post
Thank you for helpful replies
Am happy that I did not stumble into the contract without the inputs from you.
Contacted some banks and the shipyard and hope we can work out a solution that works for all parties involved
How was the final contract structured?
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