Vessel Warranties - The Importance of Compliance with the Terms

Warranties are a new yacht owner’s saving grace. In the first year or two of a new yacht’s ownership, it is well-known that things are going to break. Therefore, to show the owner that the manufacturer stands behind their product, most new boat warranties are in effect for at least a year, and in some cases up to three.

However, failure to comply with the terms can lead to denial of warranty claims and additional expenses for the owner. When an owner purchases a yacht, it is crucial that they meet with the captain and engineer to discuss the terms of the warranty and make sure all involved understand how it works.

The warranty will have specific steps to be followed, such as providing notice of a warranty claim. Some manufacturers will require notification via a form that is filled out and filed through an online portal or an email discussing the issue might also be sufficient. In rare cases, a phone call to the warranty agent or manufacturer will suffice but, as a lawyer, it is highly recommended that you follow up any phone call with an email. 

After properly notifying the manufacturer of the warranty claim, the manufacturer may opt to do one of the following:

1. Instruct the owner to enlist the services of an approved warranty agent to rectify the issue and either pay the agent directly or provide reimbursement;

2. Send a representative of their own to the yacht to investigate and report back to the manufacturer; or

3. Provide instruction to the engineer on how to fix the issue.  

During this time, the owner and crew must remain somewhat patient because the issue they are experiencing may not have arisen on any other yacht in the past and it may take some time for the manufacturer to provide the proper remedy. It is important to make sure the crew of the yacht do not take matters into their own hands, unless in an absolute emergency. 

Most manufacturer warranties contain limiting language that relieves them from any obligation to repair components such as engines, generators, and air conditioners. Therefore, during due diligence of the purchase, it is essential to make sure the warranties for such components are provided as a condition of closing. Immediately after closing, the owner or captain should contact the component manufacturer and reregister the warranty under the new yacht owner’s name.  

For example, recently, a yacht owner was unhappy with a portion of exterior paint on a one-year-old yacht. Its shine had faded, and many blemishes had come to light. After informing the manufacturer, the captain failed to provide the manufacturer an opportunity to address the paint and had a portion of the yacht repainted. Six months later, another area of the exterior paint began suffering from the same defect. When the owner requested that the manufacturer address the vessel’s paint issues under warranty, the manufacturer denied the claim citing that the warranty specifically states that the vessel’s paint warranty will be voided if any portion of the paint is modified by anyone other than the manufacturer.  

Therefore, to avoid costly mistakes like the one mentioned above, the captain, owner, and engineer (if one is aboard) should take the time to ensure that the terms of the warranty are properly followed when submitting a claim.  Failing to do so and fixing items without the consent of the manufacturer or component manufacturer may very well lead to the denial of a future warranty claim and even voidance of the warranty.  

*The information offered in this column is summary in nature and should not be considered a legal opinion. 

Nicholas J. Zeher is an attorney at Robert Allen Law whose practice includes maritime and commercial litigation, superyacht transactions, and immigration issues. For further information related to this article, please contact nzeher@robertallenlaw.com or (561) 510-9606