Negotiation and Contract Stage
The negotiation and contract stage are the first two steps of the sale of a ship. It is normally carried out by the brokers appointed by both buyer and seller. Initially, the broker of the buyer will make the telex exchange with the seller's brokers to make an invitation to offer. The main concerns in this stage of both parties are the pricing, the particulars of the ship and the lay-days of the transaction.
After this approach, both parties will have the price bargaining and negotiations of the main terms of contract. If the basic terms are agreed upon by both parties, a recap telex which recaps the terms discussed will be exchanged, subject to details to be agreed later. With the recap telex, both parties can further discuss and bargain the main terms of contracts.
After all the details are agreed through numerous communications, a formal contract for the sale of ship - Memorandum of Agreement (MOA) - will be drawn up. There are some standard forms, contracts for the MOA like Norwegian Sale Form (NSF). However, there are times the contract may be subject to some conditions such as obtaining approvals from directors or shareholders, or licenses. After drawing the sales form, 10 percent of the deposit will be paid by the buyer and the buyer can appoint his own surveyor to inspect the ship.
Read more about this topic: Sale And Purchase Of Ship
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