A refit contract's job is to settle in advance the disputes that would otherwise arise halfway through. Tying payment to stages of work and check points, rather than to the calendar, is the most effective way to do it.
What the contract needs
- Scope: the specification is attached; exclusions are written separately.
- Schedule: start, interim stages and completion; the consequence of delay.
- Extra work procedure: no out-of-scope work starts without a written quote and approval.
- Check points: who inspects at which stage and how approval is given.
- Materials: brand and system; changes only with written approval.
- Insurance and risk: who carries fire, theft and damage risk while the boat is in the yard.
- Warranty and acceptance: acceptance by sea trial, and the warranty period.
Tying payment to stages
The plan below is an example; proportions vary with the job. What matters is that each payment depends on sign-off at a check point.
- Start
- An advance for ordering materials and starting work, documented by receipt of materials.
- Interim
- When stripping and opening up are complete: hidden damage shows here, and any extra work is approved in writing at this point.
- Completion
- When the work is finished and the interim inspection done.
- Acceptance
- The final payment, after the sea trial and once the snag list is closed.
Where most disputes come from
Extra work without written approval, "equivalent" material substitutions, and handovers with no acceptance criteria. All three are prevented by writing them into the contract.
Continue with this topic
- Site check points: Inspections tied to payment.
Sample clause wording
The texts below are not for pasting into a contract as they stand; they show how each point can be written. Adapt them to your job with a lawyer.
- Extras: "No work outside scope starts until a numbered variation stating its price and effect on time has been approved by the owner. Unapproved work cannot be charged."
- Hold point: "Wiring and structural repair areas are not closed before the owner or their representative has seen them. Opening and re-closing an area closed without inspection is at the contractor's cost."
- Materials: "Materials named by make and model in the quote may not be changed without the owner's written approval."
- Acceptance: "The final payment is made after the sea trial and once the snag list is closed."
- Delay: "For delay caused by the contractor, a penalty applies at the rate and cap stated in the contract; owner approval delays are added to the programme."
Subcontractors
Much refit work is often done by subcontractors: electrics, rigging, paint, upholstery. The contract names each subcontractor and their work, and states plainly that the contractor is responsible for it. When a problem arises, there is then no argument about who answers for it.
A handover file clause
Attach to the contract the list of documents due at acceptance: work done, materials and data sheets, warranty papers for new equipment, an up-to-date wiring diagram and sea trial records. If the contract says acceptance is not complete until the documents are handed over, the file does not keep you waiting for months after the work is done.
The legal character of yard work in Turkey, the right of retention and tax items are covered in detail in the refit proposal sample.
A last check before signing
Is the specification attached and measurable? Are payments tied to stages and check points? Are written approval and unit rates set for extras? Are acceptance criteria and the sea trial written down? Is risk and insurance while at the yard stated? Do the delay and dispute clauses protect both sides fairly? A "no" to any of these is far cheaper to fix before signing than to argue about during the work.