What happens if my charter expenses exceed the APA?

Source draft 1

Answer

If authorised charter expenses exceed the APA advanced, the charterer will generally be required to provide additional funds in accordance with the charter agreement.

This can happen when guests request additional cruising, extensive fuel use, premium provisioning, expensive marina berths or other significant expenses.

The captain or broker should normally be able to monitor expenditure during the charter so that the charterer is not surprised by a significant shortfall at the end.

Analysis

APA management works best when the expected itinerary and guest preferences are discussed before the charter. Major changes during the charter can materially change expenditure.

Broker Comment

If you are planning an expensive dinner ashore, additional cruising or a significant itinerary change, it is sensible to discuss the financial impact with the captain or broker beforehand.

Source draft 2

Answer

If actual charter expenses exceed the APA provided, the charterer will generally be required to provide additional funds in accordance with the charter agreement.

This can occur because of increased fuel consumption, additional cruising, higher provisioning costs, marina fees, special requests or changes to the itinerary.

The final treatment depends on the charter contract and the circumstances of the charter.

Analysis

The APA is an advance, not necessarily a spending limit. A charterer requesting substantial changes during the week should understand that additional expenditure may follow.

Broker Comment

This is one reason we discuss the intended itinerary and spending preferences before the charter begins. A client who wants to cruise extensively should not budget on the assumption that the initial APA will necessarily cover every eventual expense.