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Post #5.
Proper purchasing etiquette, part 2
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Yes, after the sales agreement has been signed by both parties. The deposit is usually part of the terms of the agreement.
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Got it. Thanks, I thought something was being blocked on me. The basic flow of deposit to acceptance to close is the same, but the substance of the current YBAA form is dramatically different than that one, which was from 2004.
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I've seen this done one of two ways and I think the difference is how well the broker or owner knows or trusts you. The standard is actually to attach the deposit check to the signed contract proffered by the buyer. This has the advantage of demonstrating the buyer's integrity too. If the seller signs it, the check is cashed. Sometimes the price is tweaked and the documents amended, but the buyer is not asked to update that check. In other cases, you wait until the seller signs and then send the deposit. The standard contract, however, doesn't really call for a date this has to arrive or the deal is off, so it requires a bit of trust on all parties. One method I've seen used is the broker holds onto the fully executed contract, sort of like it was in document escrow, and won't give it to the buyer, until the deposit arrives.
Confused here............was the contract attached in #5 not the current one ?
If so, can you attach the current one ?
............this thread and the previous one is hugely helpful to me.....thanks to the OP for posting and everyone for the thoughtful information shared here.....11/10.
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If you look at the very bottom of the draft posted above, it says for use through Dec 2004. I signed one that said use through Dec 2020 in the Fall and much of the default and representation language was different. As I said, the basic substance of how the transaction flows is the same.
Note the one above has a Copyright noted and the one I recently signed makes that more clear, by disallowing any non-YBAA member from using the form. I would post a sanitized copy, but prefer not to be in the chain of a copyright pursuit. I'm not sure they aggressively pursue them, however.
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It's not hard to write your own contract. Just use the referenced one as a template or guide, but customize it to your needs.
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The only downside to writing one's own contract is being unfamiliar with contract laws on void or voidable terms. If certain reps or warranties are not permitted, the injured party may not be able to use the agreed upon term. It's a one reason the forms are constantly updated.
A silly example...... we could agree and sign a contract that states, if you don't sell me the boat, I can kill you. Of course, that's not a legal contract term, so would be struck, despite the fact that we agreed to it. The real issue is far more nuanced than that. This is also why contracts typically include a statement to the effect that all the parties agree all other terms remain in effect, if one is deemed void. Otherwise, in some cases, the entire contract can be voided, for the defect in one part.
A silly example...... we could agree and sign a contract that states, if you don't sell me the boat, I can kill you. Of course, that's not a legal contract term, so would be struck, despite the fact that we agreed to it. The real issue is far more nuanced than that. This is also why contracts typically include a statement to the effect that all the parties agree all other terms remain in effect, if one is deemed void. Otherwise, in some cases, the entire contract can be voided, for the defect in one part.
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BoatUS had a template agreement on their website. I found it a bit too simplistic, so I modified it. Being a lawyer, I didn't have any misgivings in doing so (turns out the owner of the boat I was purchasing was also an attorney). I agree with Minnewaska's caveats on writing your own contract. Keep in mind that the only legal advice on the internet that you should heed is "consult a real lawyer". And I don't say that to drum up business for my colleagues. I've just seen too many well-meaning people get themselves into trouble. Note that if the amount in dispute will land you in small claims court ($5000 or less here in CT), the formalities of contract construction and interpretation are less important. Not unimportant, just less so as the judges there tend to give more slack.
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No slight intended for all the lawyers, but a boat sales agreement is far from legal rocket science. Most of the necessary clauses are standard boiler plate text that can easily be used from existing contracts. Local laws may differ somewhat but this kinds of stuff is pretty standard across most common law jurisdictions.
By all means, consult a lawyer (I'm a big fan of getting good, expert advice), but don't be daunted if you want to do it yourself. I do have more experience than most when dealing with contracts and contract law, but I'm not a lawyer. I can assure you, drafting a proper boat sale contract is a lot easier than most other DIY boat projects.
By all means, consult a lawyer (I'm a big fan of getting good, expert advice), but don't be daunted if you want to do it yourself. I do have more experience than most when dealing with contracts and contract law, but I'm not a lawyer. I can assure you, drafting a proper boat sale contract is a lot easier than most other DIY boat projects.
There is a similar standard contract used by brokers in Australia. It has two major "subject to"s, survey and sea trial.
Purchaser pays for survey. Anything not in reasonable condition for a well maintained boat tends to lead to some negotiations on price assuming the boat is near what the surveyor regards as reasonably close to a well maintained boat of that age.
The purchaser is now down the cost of the survey, the vendor is under pressure from the broker (if they have one) and also may have other pressures to sell (apart from just trying to real in a sucker for a boat with real problems not obvious without survey). So generally speaking the vendor accepts some of the findings of the survey and adjusts for the (sometimes negotiated) cost of repair to be carried out by the purchaser, sometimes by the person performing the survey. Some matters will possibly be rejected as being fair wear and tear for the disclosed usage of the boat (eg a heavily raced boat will have more general wear and tear to a cruising boat of the same age). Most times agreement will be reached, other than in the case of substantial and costly repairs (such as major undisclosed osmosis or delamination of the outer skin of the boat). In Australia the sale is generally subject to an acceptable sea trial as well as survey.
No purchaser wants to pay for 3 or 4 surveys on boats if they don't have to because of major faults.
But: some vendors are rascals, some purchasers keep looking for a better boat/deal right until the final acceptance and might use a survey or sea trial to try to wriggle out of a purchase.
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If not a different boat, there are definitely buyers who have no intent to pay the contracted purchases price and instruct their surveyor to find something they can renegotiate. Just like Sellers like to see Buyers invested in a survey, because it's harder to walk away, Buyer's like to know the seller is so close to getting those storage fees off their back, they can taste it, and might be willing to concede just a little more to finish up.
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Right, they are not like drafting a new constitution. If two parties have agreed, in good faith, and written down their agreement, a napkin would most often work out just fine. I suspect recreational marine P&S contract problems are rare, I've never had one. However, when you do, it can be awfully frustrating. There are two common contract problems.
First, both parties agreed on the terms, but ultimately don't agree with what the vague or boilerpate language specifically means. Usually, as a result of something going wrong. These end up being sorted out in court, if not walking away, because of the cost to pursue.
Second is more insidious. One party refuses to comply with a term and it turns out it is unenforceable, because the counterparty didn't realize some form of law imposes an unmet standard. These are the one's where the blood vessels in your eyes burst. The counterparty renegs and there's nothing you can do about it. While I think obvious, one example could be a clarifying verbal agreement that is later superceded by the written contract that does not include the verbal term. The buyer says, you told me all that stuff would come with the boat. The seller says, not in the contract.
I'm sure these all rarely happen and I'm not suggesting the use of a lawyer to draft one. I would suggest not using outdated forms. The lawyer probably starts with a forms library themselves.
I would offer, however, there is an intersection of art and science in these. You need enough clarity to avoid conflict, but not an encyclopedia of wherefores and whereas, which probably tell the seller you're a pita.
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Agreed.
Yeah, nah. I can see this goes nowhere. I hope it always works out.
Ya, nah. But you'll get away with DIY more often than not. It's the "not" that will bring you to destination fuc&ed.
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I do not know what an "adhesion" contract is.
The reason the "acceptance period" provision in the YBAA contract works, is that a sensible seller will limit that period to the time it takes for the buyer to do due diligence on the purchase, usually two weeks, or four weeks at the outside. The closing to exchange money and ownership occurs immediately at the end of the acceptance period. So an owner should only face keeping the boat off the market for those 2-4 weeks.
If there's any element of buyer due diligence that cannot be completed within the acceptance period, say because the boat is winterized, shrink wrapped and blocked up behind ten rows of other boats, then the parties create an escrow arrangement to manage the risks (but that is a different SN thread...).. If for any reason the sale does not proceed and close on schedule, the buyer is free to put the boat back on the market, and all is void.
The reason the "acceptance period" provision in the YBAA contract works, is that a sensible seller will limit that period to the time it takes for the buyer to do due diligence on the purchase, usually two weeks, or four weeks at the outside. The closing to exchange money and ownership occurs immediately at the end of the acceptance period. So an owner should only face keeping the boat off the market for those 2-4 weeks.
If there's any element of buyer due diligence that cannot be completed within the acceptance period, say because the boat is winterized, shrink wrapped and blocked up behind ten rows of other boats, then the parties create an escrow arrangement to manage the risks (but that is a different SN thread...).. If for any reason the sale does not proceed and close on schedule, the buyer is free to put the boat back on the market, and all is void.
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Yes, the law is pretty specific, which is what makes it useful. If it wasn't, it would be useless. Still, it's not hard to understand if you take the time.
People perceive the law as this arcane set of scriptures that only lawyers can interpret. I tell you this ain't so. But like any specialized knowledge, it takes time and effort to digest and use. This is why it is often better (more cost effective, safer, etc.) to use an established expert.
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