The aim of shipbuilding contract is to regulate a substantial and complex project which the builders and buyers assume long-term obligations to other and bear significant commercial risks.
To avoid difficulties, provision can be made for the property to pass in stage in the process of development and construction.
There is no requirement that a shipbuilding contract should be concluded in writing, it will be also legally enforceable in oral provided that necessary formal elements are present.
The main terms of an agreement, such as expenditure, timescale and risks involved in shipbuilding, are better to record in written form.
When the builder had made use of his contractual remedy to cancel the contract for the future, the buyer’s default indeed will trigger the guarantor’s liability and make the letter of guarantee operative.
If it is not mentioned or it is not an essential term, the builder should deliver the completed ship within a reasonable time.
Shipbuilding contract needs very careful drafting of provisions in contemplation of the likely event of damage before completion.