Aircraft Purchase Agreements

Written by Greg Reigel

Continued from page 1

Documents. The agreement should include a statement about which documentsrepparttar seller will sign and deliver torepparttar 119259 buyer at closing. Usually this includes a Bill of Sale (FAA Form 8050-2) and a signed current Registration Form (FAA Form 8050-3).

Pre-purchase inspection. In most transactions,repparttar 119260 buyer will want to have a pre-purchase inspection performed onrepparttar 119261 aircraft. The purchase agreement can specify who will performrepparttar 119262 inspection, what qualifications that individual must possess and whererepparttar 119263 inspection will take place. Also,repparttar 119264 buyer should makerepparttar 119265 agreement contingent uponrepparttar 119266 buyer’s satisfaction with results ofrepparttar 119267 inspection. Althoughrepparttar 119268 buyer is usually responsible forrepparttar 119269 expenses associated with a pre-purchase inspection,repparttar 119270 agreement should address which party is responsible for what expenses related torepparttar 119271 inspection.

Warranties. It is possible to include a variety of warranties inrepparttar 119272 purchase agreement representing certain conditions ofrepparttar 119273 aircraft (e.g. warranties of airworthiness, merchantability, fitness for a particular purpose etc.). However, due to space limitations most of these warranties will not be discussed here.

From a buyer’s perspective,repparttar 119274 warranty of title is probably most important. This warranty ensures thatrepparttar 119275 buyer receives title torepparttar 119276 aircraft free and clear of any liens or mortgages. Althoughrepparttar 119277 buyer will still want to obtain a title search ofrepparttar 119278 FAA Registry’s records forrepparttar 119279 airplane, havingrepparttar 119280 warranty of title included inrepparttar 119281 purchase agreement will help to minimizerepparttar 119282 risk of any unrecorded liens or interests inrepparttar 119283 aircraft.

Most sellers will want to include a disclaimer inrepparttar 119284 purchase agreement stating thatrepparttar 119285 buyer is purchasingrepparttar 119286 aircraft "As-is". This language is intended to limitrepparttar 119287 seller’s responsibility for any defects or unknown conditions inrepparttar 119288 aircraft. Ifrepparttar 119289 buyer is having a thorough pre-purchase inspection performed by a qualified mechanic familiar withrepparttar 119290 specific aircraft, inclusion of this disclaimer inrepparttar 119291 purchase agreement is probably not a great concern forrepparttar 119292 buyer.

Choice of Law/Venue. Ifrepparttar 119293 transaction involves a buyer and seller from different states, it may be prudent to include language inrepparttar 119294 purchase agreement that governs what law applies torepparttar 119295 transaction and where any disputes would have to be resolved.

Waiver and Release of Liability. The seller will want waiver and release of liability language inrepparttar 119296 purchase agreement to limit potential liability for injury or damage sustained byrepparttar 119297 buyer arising out ofrepparttar 119298 buyer’s use ofrepparttar 119299 aircraft. The language should be in bold, all caps letters to make sure it is obvious and not buried inrepparttar 119300 fine print ofrepparttar 119301 purchase agreement.

Waiver and release of liability language will not release a seller from responsibility forrepparttar 119302 seller’s intentional acts or gross negligence. Nor will it prevent possible claims from third-parties who are injured or damaged by buyer’s use ofrepparttar 119303 aircraft or fromrepparttar 119304 buyer’s minor children. However, it will preventrepparttar 119305 buyer, andrepparttar 119306 buyer’s spouse ifrepparttar 119307 spouse has signedrepparttar 119308 purchase agreement, from suingrepparttar 119309 seller if a defect inrepparttar 119310 aircraft causes an accident that results in injury or damages.

What Remedy Does An Aircraft Purchase Agreement Give You?

First, an aircraft purchase agreement is not a 100% guarantee that a buyer or seller will not be sued. In this litigious world, I don’t know that such a guarantee is possible. Further,repparttar 119311 purchase agreement alone does not make anyone do anything. If a buyer or seller does not want to comply with his or her obligations,repparttar 119312 purchase agreement will not change that. However,repparttar 119313 purchase agreement will give yourepparttar 119314 ability to go to court and have a judge makerepparttar 119315 non-performing or “breaching” party comply with his or her obligations.

Ifrepparttar 119316 purchase agreement is drafted clearly and with sufficient detail, it may be possible to haverepparttar 119317 court specifically enforcerepparttar 119318 agreement (e.g. makerepparttar 119319 breaching party do whatrepparttar 119320 purchase agreement says he or she is supposed to do). An example would be where a buyer refused to complete a transaction even thoughrepparttar 119321 seller andrepparttar 119322 aircraft complied with all ofrepparttar 119323 terms ofrepparttar 119324 purchase agreement. In this case, a court could forcerepparttar 119325 buyer to purchaserepparttar 119326 aircraft.

Alternatively,repparttar 119327 court may award money damages for losses incurred byrepparttar 119328 non-breaching party. An example of this is when a seller refuses to return a deposit even thoughrepparttar 119329 buyer has complied with all ofrepparttar 119330 terms ofrepparttar 119331 purchase agreement and has a right to return ofrepparttar 119332 money. In this situation, a court could enter a judgment againstrepparttar 119333 seller inrepparttar 119334 amount ofrepparttar 119335 unreturned security deposit.


An aircraft purchase agreement is a valuable tool to ensure that each party to an aircraft purchase transaction receives what is expected. It prevents confusion and misunderstanding and provides security that a party will have recourse ifrepparttar 119336 other party torepparttar 119337 transaction fails to perform as required. With minimal up-front time and expense, both buyers and sellers can protect their interests and maximizerepparttar 119338 likelihood of an uneventful closing and purchase.

Greg is an aviation attorney, author and holds a commercial pilot certificate with instrument rating. His practice concentrates on aviation litigation, including insurance matters and creditor’s rights, FAA certificate actions and aviation related transactional matters. He can be reached via e-mail at or check out his website at

Aircraft Mechanic's Liens In

Written by Greg Reigel

Continued from page 1

Also, ifrepparttar owner ofrepparttar 119258 aircraft is located in Minnesota, you may want to filerepparttar 119259 statement withrepparttar 119260 Secretary of State. Although it is not necessary to perfect your lien, it will provide notice to anyone who doesn’t know to check withrepparttar 119261 Aircraft Registry.

This is called “perfecting” your mechanic’s lien and must be done within 90 days after you providerepparttar 119262 work, materials or service. Once perfected, you now have a lien onrepparttar 119263 aircraft.

Perfection securesrepparttar 119264 amount you are owed withrepparttar 119265 aircraft. You then have several options. First, in order to sellrepparttar 119266 aircraft,repparttar 119267 owner will need to pay you and obtain a release beforerepparttar 119268 owner can give a buyer clear title torepparttar 119269 aircraft.

Second, you also haverepparttar 119270 ability to repossess and foreclose onrepparttar 119271 aircraft. This means you can force a sale ofrepparttar 119272 aircraft and then receive payment out ofrepparttar 119273 proceeds ofrepparttar 119274 sale. Any excess money is given torepparttar 119275 owner.

Underrepparttar 119276 first option, you runrepparttar 119277 risk of having to wait untilrepparttar 119278 owner attempts to sellrepparttar 119279 aircraft. The second option gives you more control, but is also more costly than simply waiting. However, under either option you are definitely in a better position to get paid than you would be withoutrepparttar 119280 lien.

Greg is an aviation attorney, author and holds a commercial pilot certificate with instrument rating. His practice concentrates on aviation litigation, including insurance matters and creditor’s rights, FAA certificate actions and aviation related transactional matters. He can be reached via e-mail at or check out his website at

    <Back to Page 1 © 2005
Terms of Use