Introducing our Aviation Law Services
In recognition of his expertise, Ian Gee is recommended in the Legal 500 for his aviation practice.
I want to buy an aircraft. Why do I need to employ a Solicitor?
In the same way that you would employ a reputable solicitor to put together contracts and carry out searches when buying a home, the purchase of an aircraft should be carried out with the same due diligence.
The process of purchasing aircraft is a complex procedure, often involving large amounts of money, detailed contracts and many legal rules and regulations that you must comply with. The best way to make sure you are financially and personally protected is to employ a suitably qualified and experienced Aviation Solicitor.
Your Aviation Solicitor will be responsible for making sure the purchase of your aircraft takes place as quickly and smoothly as possible and will put together a legal contract which fully details the transaction and removes ambiguity, giving you peace of mind.
What information will be included in my Aircraft Sales Agreement?
A qualified Aviation Solicitor will put together an Aircraft Sales Agreement for you and speak to you to discuss the elements that need to be included.
The information included in the contract will very much depend on the specifics of the aircraft and your circumstances, but here is a list of commonly included information:
- Is this an individual or a company?
- If a Company, does the signatory have the authority to bind it?
- What authority is legally needed?
- If a Contract is entered into by you, what if you later want to take the Agreement in the name of a Company?
- What searches can be made against the seller?
- What if there is a floating charge over the aircraft?
- What if the aircraft is subject to an HP Agreement – how can you be satisfied as to transfer of title?
- Can the documents be entered into by fax or other electronic means?
- A list of equipment and documents that are included in the price should be fully detailed.
- Information about where the handover is to take place and by what time?
- What searches can be made against the aircraft?
- Are there any manufacturer’s warranties to be transferred? For example warranties for the Seller to confirm that the aircraft conforms to its description in the Agreement, that the aircraft has a valid Certificate of Airworthiness and that the log books and records are accurate and maintained and there is no damage history.
Survey and air test
- This is an essential part of purchasing an aircraft and you will need decide how detailed you want a survey to be.
- You will also need to decide who will pay for the cost of the test flight.
- If you are not satisfied with the aircraft, then you will want to have the right to reject it or present a list of remedial work.
- How much deposit will you need to pay?
- Can the Seller forfeit the deposit if you do not complete the acquisition?
- Will you risk just paying the deposit to the seller or will you want the protection of an Escrow Service?
- Who pays the cost of the Escrow Agent?
What if you withdraw?
- What will you have to pay?
- If the Seller is able to sell the aircraft to another Purchaser, but at a lesser price, can a shortfall be claimed against you?
- Are you entitled to make any deduction?
- In what currency is it to be paid?
- What duties, levies, etc are you responsible to pay?
- If the price is in a foreign currency than you will need to know how VAT is to be converted.
Will you be able to inspect the aircraft again and test fly it again?
- If so, when and what will be the arrangements?
- What if defects are found and you do not wish to complete or want a reduction in the price?
- What sort of defect is the Seller obliged to repair and can they be penalised for delay?
- What if an Airworthiness Directive is issued between exchange of Agreements and completion?
- For how long can the Seller suspend completion?
- Do you wish to limit the number of hours/landings between exchange of Agreements and completion?
How is payment to be made?
- What steps do you have to take to ensure payment is cleared before the aircraft will be released?
What if you do not take delivery/pay the balance on the agreed date?
- Is that date essential?
- Will you have to pay interest and recompense the Seller for other expenses if they agree to delay?
- What will be a deadline date which will entitle the Seller to terminate the Agreement?
What if the aircraft has been damaged between exchange of Agreements and completion?
- Is the Seller obliged to repair, under what timescale, and can they be penalised for delay?
- What if their insurance company won't pay out?
- For how long can the Seller suspend completion?
What if the aircraft has been damaged beyond repair between exchange of Agreements and completion?
- Are you entitled to compensation for wasted expenses?
- You will want to have the Agreement terminated without any responsibility on you, and to receive the deposit back.
What steps must have taken place before legal title will pass to you?
- At what stage will risk and insurance responsibility pass to you?
- What can you do if documentation is not available to be handed over at completion?
- What conditions do you want to impose?
What if completion has been delayed due to circumstances beyond your control?
- Can you be penalised? How long can you make the Seller wait?
If the Seller gives warranties, can they restrict their duration and amount?
- You will want warranties to be effective for as long as possible.
- The Agreement should be declared to include all the terms. It is essential that all the terms are recorded in the Agreement, rather than rely on verbal statements.
If you allow an extension of time for the Agreement, can you require compliance at a later date?
- You should have it recorded that you do have the right.
Balance of the Price
- Will you risk just paying the balance of the price to the Seller, or will you want the protection of an Escrow Service?
- What if there is a Priority Notice, or a Mortgage on the aircraft?
- How can you ensure that a Mortgage is paid off and registrations cleared?
What if the Agreement is to be varied or added to by mutual agreement? How is this to be recorded?
- What if some other essential document or action is needed which had not been anticipated, can you make the Seller comply?
- You should prevent any party other than the Seller who benefits from the Agreement from enforcing any term within it.
- You should consider a requirement to refer disputes to Arbitration, rather than to Court.
- If the Seller is from another country, then you will want the Agreement to be governed by your jurisdiction.
- What steps do you have to take after completion?
- What if a defect in the aircraft causes an accident subsequent to the sale? Can you claim against the Seller?
- Is it in your interests to have the Seller named on your insurance policy?
- Do documents need to be notarised?
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Clare started work at JWK Solicitors in 2004, after completing her LLB at Oxford Brookes University and her LPC at Nottingham Law School. She works within the Commercial... Read more
After gaining an honours degree in Business Law, Ian Gee joined Jobling & Knape and qualified in 1979. Jobling & Knape was established by his grandfather John... Read more
The figures, released by the government, cover the period up to 31 March this year.