Charter Management Agreement – What You Need to Know
If you are planning to start a charter business, then one of the essential agreements that you will need to have in place is a Charter Management Agreement. This agreement works as a contract between the owner of a yacht or aircraft and the management company that will be responsible for the vessel`s operation.
A Charter Management Agreement typically outlines the terms and conditions of the agreement between the two parties. It spells out the responsibilities of the owner as well as the management company.
One of the key aspects of a Charter Management Agreement is the fee structure. This agreement will specify the fees that the owner will pay to the management company for their services. The fees can be structured in a variety of ways depending on the specific agreement, but they typically include charges for the management company`s services, maintenance costs, and crew salaries.
Another critical aspect of the agreement is the allocation of revenue generated from chartering the yacht or aircraft. This agreement will outline how the revenue will be divided between the owner and the management company. The percentage of revenue that the owner will receive will depend on the specific agreement. In some cases, the owner may receive a percentage of the gross revenue, while in other cases, the owner may receive a percentage of the net revenue after expenses have been deducted.
It is also important to note that the Charter Management Agreement will specify the duration of the contract. The agreement can be for a fixed term or an open-ended term, depending on the agreement between the two parties.
Other terms that are typically included in the agreement are insurance requirements, maintenance responsibilities, and dispute resolution procedures. The agreement will outline the insurance coverage required for the vessel and its passengers. It will also define the maintenance responsibilities of the management company, such as the regular servicing of the yacht or aircraft.
In conclusion, a Charter Management Agreement is a critical document for anyone planning to start a charter business. The agreement outlines the responsibilities of the owner and the management company and specifies the terms and conditions of their relationship. If you are considering starting a charter business, it`s important to work with an experienced attorney who can help you draft a comprehensive and legally binding Charter Management Agreement.