The MoA is signed. The escrow account still is not ready. Nobody should assume the deal is automatically dead.
SALEFORM 2025 finally gives ship buyers and sellers a clearer way out of the KYC limbo that can sit between signing and deposit. But the escape hatch only works if the parties actually switched it on.
Brokers know this stage well. The commercial deal is done, subjects are lifted, the MoA is signed, and then the transaction disappears into compliance. Beneficial ownership charts need clarification. A director’s passport expires. A bank wants another source-of-funds document. The escrow agent cannot say it is ready. Meanwhile the vessel market can move several million dollars.
Not merely because escrow is delayed. The clean SALEFORM 2025 route requires the optional longstop to have been selected, a banking-day period to have been inserted, that period to have expired without escrow readiness, and the terminating party to have complied with its own KYC obligations. Otherwise the parties need to look elsewhere in the MoA, negotiate an extension, change escrow agent, or assess breach and damages.
The pre-deposit sequence
The important distinction
Escrow agent not ready is different from buyer failed to pay a deposit that was already due. That distinction can decide whether the discussion is about an express termination right, buyer default, damages, or simply a stalled transaction.
Six questions to ask before anyone sends a termination notice
If not, do not assume SALEFORM 2025 supplies an automatic right to terminate because onboarding has taken too long.
The mechanism needs a defined deadline. An empty longstop field can leave the deal without this particular exit route.
A party that is itself causing the onboarding problem is in a very different position from one that promptly supplied everything requested.
Count the contractual banking days carefully and check notices, holidays, extensions, amendments, and any agreement to suspend the clock.
The commercial solution may differ. Replacing the agent can be better than killing a profitable transaction if both parties are fully compliant.
A sharp market move increases the incentive to use technical compliance delays as an exit. That makes the paper trail and exact contractual wording more important, not less.
Escrow delay decision table
| Situation | Deposit status | Termination signal | Commercial response |
|---|---|---|---|
| Longstop active Deadline expired, your KYC complete |
Escrow agent still not ready. | Strongest case for the optional without-liability SALEFORM 2025 exit. | Check exact wording and notices before exercising. |
| Your KYC incomplete You are holding up onboarding |
Readiness condition remains unsatisfied. | Poor position for claiming a clean compliance-based exit. | Complete KYC immediately and assess breach exposure. |
| No longstop inserted Escrow remains stuck |
Deposit may still not yet be payable. | No automatic Clause 2 longstop exit. | Negotiate extension, new agent, amendment, or legal route. |
| Agent problem Both parties cleared |
Readiness still missing. | Depends heavily on activated longstop and wording. | Consider replacement escrow agent before losing the deal. |
| Agent ready All readiness gates completed |
Deposit stage is now live. | Escrow-delay longstop is no longer the main issue. | Follow the deposit-payment timetable precisely. |
The Supreme Court backdrop
SALEFORM 2025 arrived after a real weakness in the older structure became obvious. Under SALEFORM 2012, buyers in the King Crude dispute failed to provide documents needed to open deposit accounts. The UK Supreme Court held that the sellers’ remedy was in damages rather than an automatic debt claim for the unpaid deposits because the conditions for the deposit obligation had never been fulfilled. The new wording gives parties clearer compliance duties and, if selected, a contractual longstop instead of leaving everyone trapped in that gap.
Broker and buyer checklist before signing
| Item | Ask before MoA signature | Risk if ignored |
|---|---|---|
| Escrow agent | Has the agent agreed to act and circulated its KYC list? | Signing first and discovering onboarding problems later. |
| KYC pack | Are UBO charts, corporate records, IDs, authority documents and funding evidence ready? | Deal stalls before deposit. |
| Longstop | Is the optional termination mechanism selected? | No clean Clause 2 escape route. |
| Banking days | Exactly how many days will parties tolerate? | Open-ended pre-deposit limbo. |
| Replacement agent | Can another escrow provider be appointed quickly? | Good deal dies because one intermediary cannot onboard it. |
| Financing KYC | Have lenders and payment banks identified their separate requirements? | Escrow clears but closing bank later blocks payment. |
| Notice mechanics | Who sends termination, extension, or compliance notices and how? | A valid commercial right may be exercised incorrectly. |
SALEFORM 2025 escrow-delay screening tool
Can the Party Use the KYC Longstop?
This quick screen tests the mechanics that matter before treating an escrow delay as a termination event.
Screening tool only. It does not determine legal entitlement to terminate. Amendments, rider clauses, governing law, extensions, waiver, notices, escrow wording, sanctions issues and the parties’ conduct can change the result.
