Join Date: May 2002
Thanked 9 Times in 8 Posts
Rep Power: 14
Re: What Is A Boat Really Worth?
From the YBAA Yacht Purchase and Sale Agreement form, referencing the word "title":
5. ... The closing of the sale shall be deemed completed when:
A. All documents necessary to transfer good and absolute title to the YACHT have been received by the BUYER, or by the SELLING BROKER on behalf of the BUYER;
8. SELLER’S REPRESENTATIONS: The SELLER warrants and/or agrees as follows:
A. That he has full power and legal authority to execute and perform this Agreement, that he has good and marketable title to the YACHT, and that, if necessary, he will obtain permission, prior to closing, from any authority to sell the YACHT,
E. To hold harmless and defend the BUYER and BROKERS against any and all claims incurred prior to closing that may impair or adversely affect the BUYER’s receipt, use, and possession of the YACHT, including BUYER’s condition survey of YACHT and SELLER’S possession of good and absolute title to YACHT, and to assume all costs incident to defending the BUYER and BROKERS against such claims, including their reasonable attorney’s fees.
David, in the same agreement this is what it says regarding buyer default:
12. DEFAULT BY BUYER: The BUYER and SELLER agree that the amount of damages sustainable in the event of a default by the BUYER are not capable of ascertainment. Therefore, in the event that the BUYER, after accepting the YACHT under the terms of this agreement, fails to fulfill any or all of the obligations set forth in paragraphs #5 and #9, the deposit shall be retained by the SELLER as liquidated and agreed damages and the BUYER and SELLER shall be relieved of all obligations under the Agreement. This sum shall be divided equally (50%/50%) between the SELLER and the BROKERS after all expenses incurred against the YACHT by the BUYER have been paid. The BROKERS’ share shall not exceed the amount the BROKERS would have received had the sale been completed.
But it seems 8E
. If I'm reading it right, if the seller sues because the buyer defaults, the seller has to "hold harmless and defend the buyer and brokers against any and all claims..."
and "assume all costs incident to defending the buyer."
If no one knows of the defaulting buyer having to pay up, maybe this is why.
Julie, you are reading it wrong. The indemnity given by the seller to the buyer is that the seller agrees to assume all risks relating to claims incurred prior to the closing
, for example, unclear title (the seller still owes money on a loan he used to buy the boat; if the bank now sues the new owner for repayment, the seller has to make it good), any liens (the mechanic who installed the new engine is still owed $), or anything like that. It does not include any claims incurred by the buyer's own actions (like default). Such clauses are common in all contracts for sales of major items (including real estate).