Buying a secondhand ship: the main steps

The memorandum of agreement

A secondhand ship sale is usually documented on a standard form memorandum of agreement (MOA). The Norwegian Saleform is by far the most widely used. Other forms include NIPPONSALE, the Singapore Ship Sale Form (sometimes used in Asia) and BIMCO's SHIPSALE 22.

The Norwegian form was updated in 2025. SALEFORM 2025 keeps the familiar structure of the 2012 edition but adds clauses on sanctions, anti-bribery and corruption, and emissions schemes, and allows virtual closings. Parties will see both editions in use for some time, and either will need tailoring to the deal.

Buyers and sellers are often single-purpose companies with few other assets, so it is common to ask for a guarantee from a parent company, especially of the buyer's obligations.

The deposit

Shortly after signing, the buyer pays a deposit. Practice has moved away from joint bank accounts towards an escrow agent, frequently a law firm, holding the deposit under an escrow agreement. Under SALEFORM 2025, the time for lodging the deposit only starts once the escrow agreement is in place and the escrow agent confirms it is ready to receive the funds, and both parties must supply the escrow agent's know-your-customer documents.

If the buyer fails to lodge the deposit on time, the seller will usually be entitled to cancel and claim compensation, so it is important to start the escrow and compliance checks early.

Inspection

The buyer may inspect the ship and its class records before signing, or the sale may be made subject to inspection after signing, in which case the buyer must accept or reject the ship within a short window. Standard forms also deal with underwater inspection or drydocking before delivery.

Check exactly what the inspection allows. The forms differ on matters such as whether machinery can be tested.

Notice of readiness and the cancelling date

The seller tells the buyer the ship is ready for delivery by giving a notice of readiness. Under SALEFORM 2025, that notice can only be given once the ship is at the agreed delivery place and physically ready, and failure to give a valid notice by the cancelling date is a breach by the seller.

The 2012 form has recently been tested in the courts. In July 2026 the UK Supreme Court confirmed that a buyer who cancels because the seller negligently failed to give notice of readiness in time can recover the difference between the contract price and the market price, not just its expenses.

Closing, delivery and registration

At closing, the buyer pays the balance and the seller delivers the ship together with the agreed documents, including the bill of sale. Closings are now often held virtually, with documents exchanged electronically and certain originals sent on afterwards. The list of delivery documents should be agreed early and checked against what the new flag registry will need.

If the ship will be registered in Singapore, the Registry has, since June 2025, accepted copies of title documents for new registrations and required only notarisation for documents signed abroad. Where a ship already on the Singapore register changes hands, the Registry may still ask for original title documents such as the bill of sale.

• Sign the MOA and set up the escrow arrangements.
• Lodge the deposit within the agreed time.
• Inspect, then accept or reject within the contractual window.
• Receive notice of readiness and attend closing.
• Pay the balance, take delivery and complete registration under the new flag.

Getting advice on your purchase

This guide is general information. Every sale has its own commercial terms, financing and flag requirements. Ask a lawyer to review the MOA, the escrow agreement and the closing documents for your particular ship before signing.