A cautionary tale on aircraft sales contracts

The first mistake was accepting the buyer draft the contract. That's like having your tenants write the rental agreement.

The second mistake was not ensuring there was an acceptance clause subject to the inspection by buyer.

Sounds like Austin doesn't have the time or concentration to deal with his own legal contracts and should retain the services of a good commercial lawyer with substantial contracts experience to help him out in these sorts of transactions. It is virtually impossible to draft a "perfect" legal contract, but there's all sorts of well understood clauses that should not be overlooked.

For example, I am amazed at how many times people I know make a potentially binding proposal or offer of some sort and neglect to insert an "open for acceptance until" date.
 
Last edited:
Holy crap, indeed! Make those disclosures or make "As-Is-Only" a condition of sale. Cave' Venditor!
 
In the car world it's always as-is. I don't think I'd be willing to sell an old airplane other than as-is either.
 
Needless to say, I have a lot to say, but won't.

Will say this, though: I have lost track of the number of times I have had to try to help a client out of a jam they got into because they "saved" money by not calling me before they did a deal.
 
Eh, what comes around, goes around.
I felt pretty upset about paying $100 for an app then having the developer subsequently release an update that disabled the app if I didn't start paying a monthly ransom, or I mean subscription, to allow me to continue to use the app that I had bought.
 
It may sound harsh, but that guy sounds like a total idiot to accept that contract. Why anyway, in a split judgement, would he get default status as the loser? The whole thing is written in much too much of an "unhinged rant" fashion with all caps, multiple exclamation points and so on to have any faith at all in what is written.
 
I am not his lawyer, but I have... issues... with the whole analysis.

But, as Katamarino notes, it may just come down to signing a Really Stupid Contract.
 
The guy seems to be complaining about the buyer, when he should be saying, "Wow! I'm a doofus!"
 
tawood said:
The guy seems to be complaining about the buyer, when he should be saying, "Wow! I'm a doofus!"
Click to expand...

Well, that, and people suck. The buyer specifically wrote the contract such that he could find small defect in the plane and then go suck the blood out of the seller. I hope the buyer gets his due rewards in the afterlife.
 
What kind of lawyer should I be looking for if I want someone to review or write a sales contract?

The few times I've thought I'd like to see a lawyer about something, all I find in the "yellow pages" (google search) are criminal and injury people.
 
I wonder how many times the buyer can keep running back to that clause? Engine doesn’t make TBO comes to mind.

In the settlement, I’d damn sure address that issue.
 
Might be cheaper to just buy the airplane back. It obviously has a serious defect (the dent), so offering what the buyer paid plus expenses is a very generous offer...
 
PS if you care to read more about the author, this is the inventor of X-planes, Austin Meyer.
I understand he started with nothing, wrote code to become a millionaire, built an Evolution. He is also the one taking a stand against the scourge of Patent Trolling.

PS as much as he might have screwed up in this contract issue; I daresay many of us might have done the same thing. Not too many ordinary trusting people would bat an eye at contract language and I think many, many fail to involve an attorney to review occasional contracts.
 
Yes. See above. It's not from lack of trying.
 
Never signed a contract and I don't think I ever will. I get money, they get airplane and they can send the form to the FAA. If somebody needs a lawyer to buy an airplane they can buy one from someone else.
 
If the buyer is presenting you with a contract,and they have set the terms,it’s time to have your own lawyer check it out,or at least get a broker to check it out for you.
 
Bill Jennings said:
Well, that, and people suck. The buyer specifically wrote the contract such that he could find small defect in the plane and then go suck the blood out of the seller. I hope the buyer gets his due rewards in the afterlife.
Click to expand...
True, but I always remind myself that its only SOME people that suck, and they ruin it for everyone.
 
I...as a jury member, would NEVER award that crap.
There was beyond reasonable doubt that the dent was caused after the purchase.
Plus, if it wasn't...the buyer bought the plane with the dent.
Austin caved imo.
 
This is why you have lawyers review contracts. And why it's sometimes a good idea to let (or tell...) a potential buyer to walk.

I have issues with a number of things on this, but will note that there is no one perfect scheme for all situations (or venues).
 
A purchase agreement is a normal course of doing business with any high value airplane. It provides clear direction on what each party is responsible for, and who pays for what in the event of a dispute. When we sold the 310, the purchase agreement clearly stated who would pay for what with contingencies determined. For low value airplanes, maybe less of an issue (especially if the prebuy is more casual). With high value airplanes where repairs can get expensive fast, it's different.

I'd agree that he should have run the contract by the lawyer, and should not have accepted the "loser pays" contingency since, as he found out, it gives him no incentive to do anything but go straight to a lawyer instead of trying to work things out.

However, one important clause I'd be looking for would be that once the aircraft is inspected and sold, it is then sold in as-is condition.

Sounds like the buyer was a jerk.
 
A lot of contracts include "as-is" condition clauses, putting the onus on the buyer to do due diligence. I've even sold a house that way.
 
Not to sound too whiny, but this thread is a micro-example of my experience. On a thread about airplane contracts, with at least one lawyer in attendance, not a single reply such as "Oh, you need lawyer type XXX, they usually advertise as YYY". Called around a few places for another non-criminal thing I had, and couldn't get anyone interested. Maybe there's just so much money in huntsville a simple contract review for someone like myself was too much trouble, dunno.

But stop assuming this guy didn't try to involve a lawyer. I have, and it's been very frustrating. Y'all make it sound like it easy.. trivial even. I wish.
 
Skyrys62 said:
I...as a jury member, would NEVER award that crap.
There was beyond reasonable doubt that the dent was caused after the purchase.
Plus, if it wasn't...the buyer bought the plane with the dent.
Austin caved imo.
Click to expand...

"Beyond a reasonable doubt" isn't the standard in civil cases. I also didn't see anything in the story where the seller denies the damage happened before the sale...in fact, it sounds like he may have known about it (not that it excuses the buyer's inspection for missing it).
 
"As is" it's illegal in many states, at least for Real property, and if you do not disclose something you know it will not likely hold up in court.
Buying an acft As Is, without at least having the affirmation that is Airworthy, unless sold for parts, it's not a very good idea. Many sellers seem to forget the damage history. You can ask them about damage history and they say No, fly across the country and find out that there is hail damage, skins replaced, bird strikes.. end up spending a lot of money and have no recourse. Part of the problem is that some of the large orgs. are suggesting the As Is as part of the agreement.
It would seem that buying / selling an aircraft is getting more like car sales, any thing goes.
 
bluesideup said:
"As is" it's illegal in many states, at least for Real property, and if you do not disclose something you know it will not likely hold up in court.
Buying an acft As Is, without at least having the affirmation that is Airworthy, unless sold for parts, it's not a very good idea. Many sellers seem to forget the damage history. You can ask them about damage history and they say No, fly across the country and find out that there is hail damage, skins replaced, bird strikes.. end up spending a lot of money and have no recourse. Part of the problem is that some of the large orgs. are suggesting the As Is as part of the agreement.
It would seem that buying / selling an aircraft is getting more like car sales, any thing goes.
Click to expand...

The way it normally works in aviation is that the buyer performs a pre-buy inspection (or usually his shop performs it) as part of the purchase process. Once that is completed and negotiations regarding discrepancies are completed, then it is sold as-is from that point forward.

Now, if you outright lied or withheld known information regarding the aircraft then I wouldn't expect that to hold up in court if they could prove beyond a reasonable doubt that you had knowledge. I've seen some cases like that where it was known that a seller knew about a condition but hid it, only to have the buyer discover it later. These cases likely end up going to court.

On the flip side, the seller should NOT be liable for something that he or she was not aware of. Many aircraft have missing logs, which means you have no idea how many gear ups occurred in that timeframe or other damage events. Also, you never know when an AD will come out or when an engine will grenade, so a seller shouldn't be liable for those.

Personally I would not sell an aircraft without it being understood that the aircraft is as-is once the money is transferred. I also will be honest about my knowledge of its history or its warts, so the buyer won't have any grounds for saying I hid information, and I'll cooperate with a prebuy provided that the shop performing the prebuy is one that I have good trust in. A prebuy can go bad for the seller if a bad shop or mechanic is involved since you're letting someone else open up your aircraft. With the 310, the prebuy the buyers did was done by the #1 Twin Cessna shop in the country, and I was 100% comfortable with their capabilities.
 
Ted DuPuis said:
I'd agree that he should have run the contract by the lawyer,
Click to expand...

I'd like to know Austin's timeline. It could be that he went from impoverished computer geek to multimillionaire overnight and had not yet learned the ways of the world.
Being naive about contracts is common with your average Joe. I only learned about them through the assistance of a generous attorney and the occasional instance where I was faced with one.
 
bluesideup said:
"As is" it's illegal in many states, at least for Real property, and if you do not disclose something you know it will not likely hold up in court.
Click to expand...
Note that I didn't say "no disclosures" - I gladly disclose what I know and go through the paperwork. But if I can do an "as-is" transaction (with disclosure of mandatory reporting to the best of my knowledge), I will do it.
 
Where are posts like this whenever someone says 'loser pays' is the solution to our litigious society? :rolleyes:
Don't even need to leave POA to find them. ;)

Nauga,
who is simple enough to know it's never that simple.
 
Skyrys62 said:
I...as a jury member, would NEVER award that crap.
There was beyond reasonable doubt that the dent was caused after the purchase.
Plus, if it wasn't...the buyer bought the plane with the dent.
Austin caved imo.
Click to expand...
Juries typically don’t. Awards of attorneys fees is generally left to judges after the jury is long finished, and "prevailing party" a deeper analysis than who won.
 
Bill Jennings said:
Careful with that lmgtfy. Don't want to appear snarky.
Click to expand...

Just can't believe someone would buy/sell something that valuable and complex without escrow/title services. And, to let the buyer just dictate the sales agreement is asking for it.
 
Having the losing party pay legal fees isn't anything out of the ordinary in a contract and is built into the legal system of some other countries. I would guess just about everyone has signed a contract, loan or mortgage that contained a provision like this. Heck, when you get commercial/business loans, many times you also agree to a confession of judgment, now those can be harsh! These legal fee provisions can actually be a good thing because it curtails frivolous law suits and promotes settlement of claims unless of course, you signed a one sided contract that can continuously open yourself up to liability without offering much of defense like in this case. Ultimately the Seller should own up to his mistake of signing an overall bad contract and stop blaming a pretty standard provision that may still have been included even if he had a lawyer involved.
 
Last edited:
I’m a bit curious what the buyer wants? Austin seems wrapped up in the fact that the buyer is suing and the cost of going all the way through trial. What would it take to settle? Did he fail to disclose the bird strike? Does the buyer want out of the deal? Money off the agreed price?

I have a hard time the buyer’s goal is to go through an entire trial/appeal process just for sport.


Sent from my iPad using Tapatalk
 
You must log in or register to reply here.
Back
Top