The greatest risk in a yacht construction contract is that the payment schedule becomes detached from production progress and from the buyer’s safeguards. A high advance paid for a boat that has not yet been completed does not by itself show that ownership of the boat has passed to the buyer, or that the buyer is protected against the payment difficulties of the shipyard. The contract must set up the technical specification and the legal safeguards within the same structure.
From the standpoint of Turkish law, the obligation to produce a yacht with specified characteristics is, as a rule, assessed within the framework of the contract for work (eser sözleşmesi) under Article 470 et seq. of the Turkish Code of Obligations (TBK). The sale of a ready-made boat, or a mixed relationship made up of various performances, may produce different results. This article focuses on the construction of a new, custom-built yacht.
Parties and technical specification
The duties of the shipyard, the designer, the engineering firm, the main equipment supplier and the project manager should be kept separate from one another. A failure of an engine or equipment that the buyer procures directly and faulty installation by the shipyard are not the same ground of liability. Who holds approval authority, and which decisions the captain or the project representative may take to bind the buyer, are set out expressly.
The specification should make promises such as size, displacement, speed, range, consumption, noise, vibration, cabins and technical equipment measurable. Where it is not stated under which load, sea and fuel conditions a speed commitment will be tested, a conflict of interpretation arises at delivery. If the advertising brochure, the drawings, the contract and the specification conflict, it should be written which document takes priority.
Flag, class and product conformity requirements should be decided at the start of the project. Obtaining a technical document does not mean that all the performance promises in the contract have been fulfilled. Conversely, a later request by the buyer for a different flag or for commercial use may create a change of scope and cost. This risk should be priced in advance.
For details on this subject, see the section on yacht law in Türkiye, flag, taxes and import procedures.
Payment stages and protection of the advance
Payment tied to verifiable production stages, rather than to a calendar date, provides a structure that is easier to supervise. For stages such as the keel, completion of the hull, machinery installation, launch and delivery, independent inspection or an appropriate progress document may be sought. The percentage for each stage should be determined according to the project and cost structure of the boat; a general percentage template should not be presented as if it were a statutory requirement.
An advance refund guarantee, a performance guarantee, a parent company guarantee and retention of part of the price address different risks. The beneficiary, amount, expiry, demand documents and governing law of a bank guarantee are examined. If the guarantee expires automatically although the project is delayed, an apparent safeguard may be lost in practice.
If the buyer is to acquire a right in the hull under construction or in materials by paying installments, this must be regulated separately in terms of real rights, the registry provisions on ships under construction, and the effect on third parties. The sentence “The parts paid for belong to the buyer” alone does not resolve commingled material in the shipyard area or a prior financing right. Separate marking, inventory and legally required records are important.
For details on this subject, see the section on exclusions from coverage and denial of claims in yacht insurance.
Additional work without a change order
Change is normal in construction projects; uncontrolled change, however, is the main cause of delivery and price disputes. For each change, the scope, the additional or reduced price, the effect on the delivery date, the need for retesting and the person giving approval should be determined in writing. The situation in which the buyer’s design preference increases the cost is distinguished from the work the shipyard performs to achieve the result it promised at the outset.
For a lump-sum price, Article 480 of the TBK is considered; for an approximate price, an undetermined price and excessive overrun, the relevant provisions are assessed. There is no general rule that the shipyard will automatically pass a cost increase on to the buyer, or that the buyer may treat every kind of additional work as included in the initial price. If there is a mechanism for exchange rate and raw material changes, the objective index, the accounting period and document control should be defined.
Delivery delay and early intervention
The launch day planned in the contract should be separated from the day of legally completed delivery. That the yacht has been floated does not in every case mean that delivery has taken place, if flag documents, tests, software access and the safety file are missing. On the other hand, the consequences of the buyer’s refusing acceptance without justification should also be regulated.
Article 473 of the TBK is important with respect to the rights that the project owner may invoke without waiting for the delivery date where the contractor does not start the work on time or it becomes clear that the work cannot be finished on time. For default on the delivery date, Article 117 et seq. and Articles 123–125 of the TBK are considered. The additional period, the cases that make setting a period unnecessary, and the consequences of the right chosen depend on the characteristics of the case.
The start of the delay penalty, its upper limit, which delays are excluded and its relationship with a claim for additional loss should be written. Because, under Article 179/2 of the TBK, acceptance of performance without reservation may affect a claim for a contractual penalty for delay, the delivery record is important. Alongside the amount of the penalty, how the right will be preserved at the time of acceptance should also be considered.
Acceptance tests and the list of outstanding items
| Subject of acceptance | Measurable record | Clarity recommended for the legal consequence |
|---|---|---|
| Performance | Sea trial data and test conditions | Correction of the deviation or its effect on the price |
| Equipment | Make, model and serial number | Condition for approving the substitution of an equivalent product |
| Documents | Technical file, manuals, registration papers | Whether a missing document is to be treated as an obstacle to delivery |
| Minor deficiencies | List of outstanding items | Completion date and the amount to be retained |
| Safety defect | Independent technical determination | Postponement of delivery and use |
Provisional acceptance, final acceptance and the start of the warranty should be defined according to the contract used. It may be possible to complete the items on the list after delivery; but it is not correct to treat a defect that prevents the safe use of the boat as a minor deficiency. The delivery record should state clearly which rights are reserved and which technical findings are not accepted.
For details on this subject, see the section on objection to an expert report in a civil case.
Liability for defects and contractual warranty
Articles 474–478 of the TBK form the basic framework regarding the inspection of the work, notification of the defect, the rights of choice, acceptance and the statute of limitations. Where the yacht is movable property, the distinction in Article 478 between the basic two-year period and the twenty-year period in the case of the contractor’s gross negligence is important. The commencement of the period, the nature of the defect, any longer warranty in the contract, and the application of consumer law are examined separately.
The warranty period and statutory liability for defects are not the same. The engine manufacturer’s warranty does not by itself remove the shipyard’s liability for installation. Provisions should be written on where warranty repairs will be carried out, travel and towing expenses, dismantling and reinstallation, storage, and the period during which the boat is out of service. An abstract reference to a service network abroad may not provide a solution that is actually accessible.
In a defect claim, the removed part, production records and test results should be preserved. Carrying out a repair does not by itself show that the defect was not present initially, or that the buyer has waived all its other claims. On the other hand, the buyer’s own intervention may be important in assessing the source of the defect and the growth of the loss.
Design rights and the project file
The buyer’s payment of the price of the boat does not mean that it has taken over all design rights. The right to use the drawings, a possible future refit of the boat, the production of spare parts, software access and the application of the design to other customers should be regulated separately. The license chain between the designer and the shipyard must satisfy the right of use promised to the buyer.
The 2026 study by Halil Emre Gürler on intellectual property rights in yacht design and the precautionary attachment of a vessel shows that this intersection should be examined separately. Not every monetary claim arising from a design infringement can be regarded as a maritime claim merely because it relates to a yacht. For this reason, contractual payment security and intellectual property protection should be established separately.
Termination of the contract and completion
If the shipyard abandons the work or the buyer terminates the contract, the fate of the hull, materials, drawings and subcontractor contracts should be determined. It should not be forgotten that, under Article 484 of the TBK, the project owner’s ability to end the contract before completion has financial consequences. Withdrawal or termination for cause is not the same as freely renouncing the contract.
When the right of completion is regulated, access of another shipyard to the site, transport of the boat, use of molds and software, existing security and continuity of insurance are considered. If foreign law or arbitration has been chosen, its relationship with the mandatory rules of Turkish law and with its rules on real rights is examined separately. Whose interest the construction insurance covers, and at what moment risk passes, should be consistent with the contract.
For details on this subject, see the section on contracts, liability and disputes in tourism investments.
Conclusion
The value of a yacht construction contract lies in making the continuation of the project, or its safe liquidation, possible when a problem arises. The technical specification, change order, payment security, acceptance and warranty should be regulated within the same timetable. Even the seemingly strongest security may be rendered ineffective by a wrong expiry date or an unclear demand condition. If security against the shipyard is required, the precautionary attachment of a vessel; for the later purchase of a completed yacht, the yacht and boat purchase check; and for the permit and modification framework, yacht construction and refit contracts and maintenance and repair processes, together with the maintenance and refit contract that follows, are examined separately.
Frequently Asked Questions
Does that part of the boat automatically become mine as I pay the installments?
No. The contract, the real right and the required registration conditions are assessed separately.
Does launching count as delivery?
Not in every case. The acceptance tests, the documents and the delivery conditions in the contract are decisive.
When the warranty ends, do all rights in respect of defects end?
The warranty and statutory liability for defects are different. The applicable law and the statute of limitations are examined separately.
Can the captain’s oral approval be sufficient for additional work?
Authority of representation and the method of amendment in the contract are decisive. A written record of the effect on price and time is safer.
In case of delay, must I wait for the delivery date?
If the conditions of Article 473 of the TBK are met, an opportunity to intervene earlier may arise. Not every delay produces the same result.
Can I give the design of the yacht I bought to another shipyard?
Design, software and license rights must be examined separately. Ownership of the boat does not mean the transfer of all intellectual property rights.
Sources and legal bases
- Turkish Code of Obligations, Law No. 6098. General terms and conditions, exclusion of liability, sale, earnest money, lease and contract for work. Link
- Turkish Commercial Code, Law No. 6102. Articles 931, 935, 940, 1001, 1320, 1352–1376, 1420–1446; different pages depending on the article. Link
- Law No. 6502 on Consumer Protection. Consumer transaction, defects, unfair terms and jurisdiction. Link
- Code of Civil Procedure, Law No. 6100. Subject-matter jurisdiction, evidence and preservation of evidence. Link
- Halil Emre Gürler — Applicability of the Precautionary Attachment of a Vessel in Respect of a Claim Arising from Infringement of an Intellectual Property Right in Yacht Law (Yat Hukukunda Fikri Mülkiyet Hakkının İhlalinden Doğan Alacak Açısından Geminin İhtiyati Haczinin Uygulanabilirliği). DEHUKAM Maritime Law Journal (Deniz Hukuku Dergisi) 9(1), July 1, 2026; relationship between a design claim and a maritime claim. Link