Buying a boat with a Sale and Purchase Agreement
Whether you are thinking to buy or sell a boat, you will have to know and understand some of the key points to get an agreement done with the other party. No matter what the deal size, you want to ensure everyone is on the same page.
To guide you in drafting your own Sale and Purchase Agreement, we have listed below the most important areas you should include on the document. We also have produced a sample document that you may consider using.
Let’s just cover a few of the basics.
First, if the transaction is really big to you, it may then be large enough to necessitate getting a lawyer involved. This is because a lot of negotiations take place during and after the drafting of the agreement. The agreement is where many of the most important decisions are made, including pricing, payment (as in, how payment be made?), etc.
The Basics: Obviously, the agreement will list things such as the parties involved (Purchaser, Vendor or legal representatives), the price, date for completion of sale, the location, etc. In other words, if there is any place where formalities are strictly followed, it’s a purchase agreement.
Purchase Price: Indicates the agreed amount the boat is sold for.
Payment: Payment is often more complicated than just instant cash reimbursement. It often includes a plan in which the payment is going to be made at intervals in the future.
Remedies on Default: In the event that (a) Vendor defaults or fails to perform any of the conditions or obligations of Vendor under the Agreement, or (b) the terms and conditions of the Agreement have been satisfied by Vendor, and Purchaser refuses or is unable to close on the Agreement within the time limits set forth, (each, an Event of Default), then in such event, the non-defaulting party’s sole remedy shall be entitled to declare the Agreement terminated and, upon such termination, the parties shall have no further rights or obligations with respect to the Agreement.
Ownership and Undertaking: This section states that the vessel is solely owned by the Vendor and full inventory of equipment and specifications attached will be passed to the Purchaser on settlement free from all debts, claims, liens and encumbrances of any kind whatsoever.
Risk: It is agreed by the parties that the risk of loss, damage or destruction of the vessel and equipment shall be borne by the Vendor until the vessel is delivered to the Purchaser. Vendor shall continue to insure the vessel until delivery to the Purchaser.
We are hoping that this helps you in buying or selling your vessel. Please note that this guide is provided for general information purposes only. We have also produced a sample agreement that may assist you in buying or selling a boat. It is similar to one that some Mariner staff have used ourselves. Remember though, we are not lawyers, so any legal advice is best gathered from a real lawyer, and that’s certainly not us!
To get a copy of our sample Sale and Purchase Document, click here
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