But don't people jack up the price because a famous person owned it? Why not jack up the price because a famous person wants to buy it since you know it will be worth more once they own it.
Ethics of straw buying...
- Thread starter Ethan2002
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Lawson_Stone
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Lawson_Stone
Are you an FFL?I held a Class 3 FFL for many years. I was responding to the issue of potentially reselling a firearm to anyone. Background check or not, it is against the law to sell a firearm to anyone whom you have a reasonable expectation to be legally ineligible.
Arnold
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The firearms discussion is seriously misleading because it has to do with a criminal law. Is there a criminal law that says that an agent cannot purchase an aircraft for an undisclosed principal? I don't claim to be an expert so I'll just say that it seems highly unlikely. Absent a criminal law then we are, I believe, looking at rather routine and ordinary civil contract law.
Is there some reason why, in the state having jurisdiction, the contract was void ab initio, because an agent is purchasing personal property for an undisclosed principal? Does the state have a consumer protection law that forbids this?
If no law, then is it part of the bargain?
1) I will sell you the airplane for $xxx but before I do so you must assure me that you are not an agent for the prior owner's family by including a clause which says as much.
If not, then was there a breach of the terms of the contract?
2) I will sell you the airplane for $xxx and in the contract we have a clause that says you will not sell to the prior owner's family.
Are either of these enforceable? I don't know. Even if the proposed clauses are enforceable what damages has the seller suffered by selling for the fair market price? Would anybody buy if if these clauses were a condition of the sale? Normally all parties are working with incomplete information. This is just another example of incomplete information. I bet you will find case law on this for both real and personal property.
All contracts are allocations of risk.
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Albany Tom
Sure they do. And I agree that raising the price may be a good option if you're the seller. I'm just saying that if the famous person hires his friend to buy something, to avoid that price bump, that shouldn't be a problem, either. Or in other words, if you're the seller, it really shouldn't matter who the product is being sold to, assuming they're all legal transactions.
Lawson_Stone
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A famous person could also easily form a small corporation to purchase the plane, leaving his or her own identity in the background.
R.L.Mauzy
Line Up and Wait
I think separating the idea of legality and ethics would be helpful. Additionally, don't try to apply this to a single product as that can go down a rabbit hole of opinion way to quickly.
So lets look at the idea of a straw purchase with out the confusing ideals of a specific product attached to it. First thing I would ask is about the legal status. A simple google search tells us if any commodity or product has a law, regulation, or rule governing it. Honestly, the legality of the situation really is that simple. There are some specific items in this world that are heavily regulated and/or controlled, otherwise it's open season as far as the legal aspect. If someone is considering this route for what they believe is a valid reason on a regulated item or commodity then they should seek professional legal council and act accordingly.
Now as for ethics, that can be a far trickier question. Who is to judge what is "ethical" in a legal transaction? I would say it's civil case law here in the US, in which case that's a fairly broad and open avenue to operate on. As stated above by others, this is a commonly used process for a multitude of reasons. The reality is, as long as no one is being defrauded or otherwise disenfranchised in the transaction ethics doesn't really come into play. I believe we have a right to remain anonymous if we choose and a so called straw purchase is a perfectly valid way to do that. So long as there is no contractual or legal obligation saying otherwise, engaging in a straw purchase or using a broker or a buying agent are one in the same and are perfectly fine.
So lets look at the idea of a straw purchase with out the confusing ideals of a specific product attached to it. First thing I would ask is about the legal status. A simple google search tells us if any commodity or product has a law, regulation, or rule governing it. Honestly, the legality of the situation really is that simple. There are some specific items in this world that are heavily regulated and/or controlled, otherwise it's open season as far as the legal aspect. If someone is considering this route for what they believe is a valid reason on a regulated item or commodity then they should seek professional legal council and act accordingly.
Now as for ethics, that can be a far trickier question. Who is to judge what is "ethical" in a legal transaction? I would say it's civil case law here in the US, in which case that's a fairly broad and open avenue to operate on. As stated above by others, this is a commonly used process for a multitude of reasons. The reality is, as long as no one is being defrauded or otherwise disenfranchised in the transaction ethics doesn't really come into play. I believe we have a right to remain anonymous if we choose and a so called straw purchase is a perfectly valid way to do that. So long as there is no contractual or legal obligation saying otherwise, engaging in a straw purchase or using a broker or a buying agent are one in the same and are perfectly fine.
Lawson_Stone
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This being the internet and all, you're being far too rational and reasonable here. I mean, call somebody a nazi or communist or something! ;-)
Seriously, I think you've nailed it here. My comment would be that if the "straw" purchaser makes false representations about the purchase to the buyer, that would at least be an ethical breach. So the example up above where a bank used a representative claiming to want the property for some socially redeeming purpose that they describe in some detail, only to be a shill for the bank which had been previously declined... I think that is certainly ethically wrong and maybe legally vulnerable too, though I don't know about the legal side.
So if someone says they are buying the plane, say, to use with an organization introducing young people to aviation and negotiates a lower price because of the benevolence of the seller, only to be buying on behalf of some other person who just wants to use the plane for personal or business travel, again, maybe not illegal (I don't know) but I would say that's unethical.