SALEFORM 2025: From Tradition to Modern Transactional Reality

Deposits – Clause 2

Clause 2 updates the deposit regime by formalising the use of escrow structures. Previously a ‘Deposit Holder’ could be specified by the parties, otherwise the defaulting position was that the deposit would be payable directly to the Sellers. Under the new regime, the default position is that the deposit shall be held by an Escrow Agent, with the parties free to appoint any mutually acceptable entity, reflecting established market practice.

The clause now makes clear that the deposit is only payable once both the memorandum of agreement and the escrow agreement have been signed and exchanged and the Escrow Agent has confirmed in writing that it is ready to receive the funds. The Buyers must then lodge the deposit within three Banking Days. This clarification improves certainty around when the deposit obligation is triggered.

Responsibility for the mechanics of holding and releasing the deposit is now expressly allocated to the Escrow Agreement and the payment provisions in Clause 3, removing duplicate release language from Clause 2 and producing a more streamlined payment structure.

Clause 2 also introduces express obligations on both parties to provide KYC and AML documentation promptly. In addition, an optional termination mechanism allows the agreement to be brought to an end, without liability, if the Escrow Agent cannot confirm readiness due to unfinished KYC within an agreed period, protecting a compliant party from being left indefinitely bound. If used, this would provide a new contractual termination right alongside the Buyers’ and Sellers’ Default clauses.

Payment – Clause 3

Clause 3 expands the available methods for payment of the balance of the purchase price. In addition to the traditional payment structure, parties may now elect to pay the balance via escrow or through conditional SWIFT instructions, reflecting common closing practices and reducing the need for bespoke amendments.

The clause also introduces an express obligation to provide any additional and reasonably required KYC documentation as may be requested by the Parties or their lenders (if applicable) without undue delay, supporting smoother and more predictable payment and closing processes.

Inspection, drydocking and predictable delivery timing – Clause 4

Clause 4 makes limited refinements to the inspection regime, primarily to improve clarity and reflect market practice. Existing inspection wording has been tidied without material change.

Most significantly, a new optional provision allows the Buyers to expressly proceed with the purchase without carrying out a physical inspection of the vessel. Where this option is elected, contractual references to the time of inspection are deemed to refer instead to the date of the agreement, providing a clear framework for documentation‑only transactions.

Time and Place of Delivery – Clause 5

Clause 5 clarifies the Sellers’ obligation to tender a valid Notice of Readiness before the Cancelling Date, strengthening legal certainty around delivery obligations. The clause also tightens the mechanism for extending the Cancelling Date by confirming that any notice requesting an extension must contain an express reference to Clause 5(c), otherwise it may not be deemed a valid notice.

Buyers’ Default – Clause 13

Clause 13 is amended to clarify that the Sellers’ rights in the event of Buyers’ default are not exhaustive. The clause now expressly states that the Sellers’ termination rights under Clause 13 apply in addition to any other termination rights available elsewhere in the agreement.

Sellers’ Default – Clause 14

Clause 14 of Saleform 2025 has been restructured to improve clarity while largely preserving the existing allocation of risk between buyers and sellers. The clause is now divided into clearly defined sub‑provisions, expressly confirming that the Sellers’ termination rights under Clause 14 operate in addition to any other termination rights elsewhere in the agreement.

The most significant development is the clarification of the Sellers’ obligation to tender a valid Notice of Readiness by the Cancelling Date and the remedies available to Buyers if that obligation is breached. New wording addresses circumstances in which an initial Notice of Readiness proves ineffective, permitting Sellers to re‑tender when the vessel is again physically ready, while also allocating responsibility for delays and associated costs where delivery occurs materially later than first notified.

Importantly, Clause 14 now expressly confirms that where Buyers terminate and the Sellers’ failure to meet their contractual obligations is the result of negligence, Buyers may be entitled to loss‑of‑bargain damages. This clarification has been introduced against the backdrop of the Lila Lisbon litigation, which concerns Clause 14 under Saleform 2012, and is intended to provide commercial certainty regardless of the outcome of the forthcoming UK Supreme Court decision.

Further analysis of the Supreme Court appeal and its implications for sale and purchase transactions is available in our dedicated article: Lila Lisbon: Supreme Court to have the last word.

New Clauses

Clause 16 Anti‑Bribery and Corruption

Introduces reciprocal warranties, indemnities and termination rights where compliance with applicable anti‑bribery or corruption laws is breached.

Clause 17 Sanctions

Establishes a comprehensive sanctions regime covering warranties, notification obligations, suspension of performance and both fault‑based and no‑fault termination rights.

Clause 18 BIMCO ETS Clause for Memoranda of Agreement 2025

Incorporates BIMCO’s standard clause addressing responsibility and risk allocation under the EU Emissions Trading Scheme in sale and purchase transactions.

Clause 19 BIMCO FuelEU Maritime Clause for Memoranda of Agreement 2025

Incorporates BIMCO’s standard wording to address compliance obligations and cost allocation under the EU FuelEU Maritime regime.

Clause 23

Confidentiality: Introduces a standalone confidentiality obligation binding on the parties and their advisers, which survives termination but cannot itself give rise to termination.

Summary

Saleform 2025 is, in many ways, an appropriate centenary edition. It does not seek to disturb the familiar structure that has underpinned ship sale and purchase transactions for decades, but it does recognise that the transactional environment in which those forms now operate has changed materially. 

A hundred years on, the Saleform remains recognisable but it has grown up with its users, reflecting not nostalgia for how deals were once done, but a clear‑eyed acceptance of how they are done today.