In the MYBA charter agreement if an owner sells the yacht after they have already agreed a charter they have to pay damages to the charterers. The amount of the damages depends on the amount of notice they give the charterers. They also have to pay the charterers’ broker commission on the damages.
A central agent (broker) was negotiating a charter and was asked by the owner to amend the relevant provisions such that the usual damages, if the owner sold the yacht prior to the charter, would not be payable. Presumably the owner was considering selling the yacht. Unfortunately, during negotiations the broker forgot to make the amendments.
The owner did sell the yacht and therefore cancelled the charter within 14 days of its commencement. The charterer and the charterer’s broker demanded the full return of the charter fee plus the liquidated damages of 50% as was their right in the unedited MYBA agreement.
The liability was clear-cut, the broker was asked to do something, which they failed to do and the owner incurred a liability which had the broker done as instructed probably would not have been incurred.
Therefore, ITIC reimbursed the broker in full when they paid the owner the sum they had to pay in liquidated damages (less their commission) of EUR 75,000.