The sale and purchase of a ship looks daunting from the outside, but it follows a well-worn sequence that the market has standardised over decades. Knowing the order of events — and what has to be true at each stage — keeps a deal moving and stops avoidable surprises at closing. Here is the S&P process from first indication to delivery, as it actually runs, and where each stage can trip a deal that is not properly prepared.
1. Recap: agreeing the main terms
A deal begins with negotiation of the principal commercial terms — price, delivery range and date, inspection regime, deposit, and any key conditions — usually exchanged through brokers and captured in a “recap”. This is the commercial handshake that everything else builds on. Get the recap right and the documentation follows smoothly; leave ambiguity here — on the delivery window, on what inspection the buyer gets, on the condition standard — and it resurfaces painfully later, often when neither side wants to reopen the deal.
2. Letter of Intent and subjects
Where used, a Letter of Intent (LOI) records the agreed terms and any outstanding “subjects” — conditions still to be satisfied, such as physical inspection, review of class records, or board or finance approval. Subjects must be lifted within agreed timeframes; until they are, neither side is fully committed and the ship can, in principle, be sold elsewhere. Tight, time-bound subjects protect both buyer and seller: they give the buyer room to verify what they are buying while giving the seller certainty that the deal will not drift indefinitely.
3. Memorandum of Agreement (MOA)
The deal is then formalised in a Memorandum of Agreement, most commonly on a recognised standard form such as the Norwegian Saleform. The MOA sets out price, deposit, inspection terms, the delivery range and place, the condition on delivery, the documentation each side must provide, and the default provisions that apply if either party fails to perform. It is the contract that governs the sale — every later step references back to it, which is why getting the rider clauses right matters as much as the headline price.
4. Deposit and inspection
On signing the MOA, the buyer typically lodges a deposit — commonly around 10% of the price — into a joint escrow account, released only per the contract terms. Inspection then takes place as agreed: a physical inspection of the vessel, usually afloat, and a review of her classification records. The condition survey and class-record review are where a buyer confirms what they are paying for, and findings feed back into the deal under the MOA’s inspection and condition clauses. A buyer who has done the homework — knowing what a sound ship in that segment should look like — turns survey findings into leverage rather than alarm. Our buyer’s due-diligence guide covers exactly what to check.
5. Classification, flag and documentation
In parallel, both sides assemble the closing documentation: confirmation of class and survey status, the bill of sale, the protocol of delivery and acceptance, and the paperwork for deletion from the seller’s registry and registration under the buyer’s chosen flag. If the buyer is re-flagging on delivery, this is arranged ahead of time so registration does not delay closing — flag changes have their own timelines and approvals. A clean, IACS class position with no outstanding recommendations keeps this stage simple; a record with open items can stall a deal at the worst possible moment.
6. Delivery and closing
At delivery — within the agreed range and place — the vessel is physically handed over, the bunkers and lubricants remaining on board are settled at the agreed price per the MOA, and the parties sign the protocol of delivery and acceptance recording the time and condition of delivery. Funds are released from escrow, ownership transfers under the bill of sale, and the ship is registered under her new flag. The deal is closed; the ship can trade. Well-prepared parties close in minutes because every document was readied in advance.
Where a broker carries the deal
Across all six stages, the S&P broker keeps the parties aligned, the timeline tight, and the documentation in order — from shaping the recap to coordinating inspection and steering closing so neither side loses momentum. See how we support buyers and sellers through our brokerage services, review completed transactions in our case studies, and browse current tonnage on our vessels for sale page. To start a deal, talk to a broker.