What is a Boat Purchase Agreement?
A boat purchase agreement is a legally binding contract between the buyer and seller of a boat. It serves as the formal documentation of the transaction, detailing all the necessary information that reflects a mutual agreement between the two parties. This document is critical to the boat buying process.
There are hundreds of details that go into selling a boat, from specifying what exactly is being sold to how much could potentially be made from the deal. A boat purchase agreement template could help with organizing all of this information accurately . The purpose of a boat purchase agreement is clearly defined and all the desired details can be included with ease.
The accuracy with which a boat purchase agreement is filled out and signed is not only important for keeping the deal legal, but also for covering both you and the seller for any details that could be overlooked. If there are terms to be met before the deal closes, including financing, repairs, or any other contingencies, having a purchase agreement will give you the leverage to hold the seller accountable.
Components of a Boat Purchase Agreement
One of the most important aspects of any purchase agreement template is the basic creator information. This is the information that is going to be used to contact you and generally includes your name and email, along with the name of your lawyer (if you have one). The seller will fill out this information, as well as some information on their own, so don’t fill it out yourself.
The next part of a purchase agreement template is the details of the transaction itself. Who are the parties? That’s where you’ll fill in your own name, along with the name of the seller. You’ll also include the date of the transaction, as well as the date of sale. All other details of the transaction will also go here.
The third part of the transaction that you’ll want to fill out is the legal description of the boat. This includes the year, manufacturer, and type, as well as the vessel ID number and HIN number. If this information is unknown, then it may be left blank. Some other details that might include are the registration number, classification, home port, etc. Basically, the buyer must be able to identify the boat clearly through this description.
The fourth section of a template purchase agreement will include the Purchase Price. As a buyer, you have the option of including all the details of the purchase price, or leaving some out to be described later. As long as the price is clear, you’ll be in good shape. If you have contingencies, such as I’ll pay you x-amount if I find it to be in good condition, you would note that here as well, allowing you to move on with the boat.
Finally, you’ll need to include various release clauses in your purchase agreement template. For example, if you also sold the boat in the past, you’ll need to include a statement releasing you from liability, and showing that you released the seller once he sold it. Listing and release clauses make sure that everyone gets what they are supposed to get, and that no one gets into trouble. It also frees you from liabilities that you don’t own, including mechanic’s liens, salvages, and repossessions.
Common Pitfalls of Boat Purchase Agreements
The key to a successful purchase agreement is accuracy and detail. You must create a boat purchase agreement that is legally enforceable, fully outlines the deal, and provides for the potential problems that can arise. Many common mistakes are found in these agreements, so here we provide you with a list of the most common mistakes to avoid when completing a boat purchase agreement.
1. Omission of Legal Language
No matter how tempted you are to go without any legal language, do not do it; there are certain legal statements, phrases and clauses that must be included for enforceability. Legal language is typically included to protect both the buyer and the seller.
2. Omission of Storytelling
Another problem we commonly see when people create their own purchase agreement is that they leave out a whole piece of the story. For example, they don’t include how the buyer plans to pay, or the method by which they will secure finances from the bank, or they omit who will be responsible for repairs and upkeep. If you leave out a whole piece of the story, you risk negatively affecting your legal standing. It is incredibly important that you have a boat purchase agreement that tells the whole story.
3. Omission of Boat History
Be sure that you include a full history of the boat in your purchase agreement. This should include the year of manufacture, the make, model and dimensions of the boat, the color, tonnage and hull identification number, the hull view showing left and right profile, over head and half front and half rear view. Additionally, you should clearly state that the sale of the boat is taking place "as is."
4. Omission of Retainers and Escrow
Escrow and retainer fees are almost always required, be sure to state exactly how much is expected and how and where this should be delivered. The buyer and seller should both acknowledge the holding of the escrow before an interest bearing account and signing will be required to authorize the release of the funds to the owner.
5. Omission of Terms and Conditions
There are many other exponentially important terms and conditions that must be included and agreed upon in your purchase agreement. For example:
-Amount expected to be paid and when
-When the seller will deliver possession
-The description of the boat
-That the governing law will be that of the state in which transfer is made
-The number of days reconveyance of either party
-That all notified change must be in writing and signed by both parties
6. Leaving out Statute of Frauds
The Statute of Frauds is a type of state-level law that requires certain types of contracts to be in writing. Any agreements that last less than a year don’t need to be in writing, any contract involving a sale of more than $500 must be in writing.
Customizing a Boat Purchase Agreement Template
Navigating the world of boat purchases can be complicated, but a solid purchase agreement template makes the journey a bit easier. However, simply filling out a generic purchase agreement template without taking the time to tailor it to your specific circumstances can be a risky move. When it comes to legal documents, one size never fits all. Customizing a purchase agreement can help ensure that all parties are protected and that the buying and selling processes go smoothly.
The process of customizing a boat purchase agreement template starts with reading through the base document carefully. It is important to understand the terms of the original agreement before you can effectively tailor it to your individual needs. You have the option to add or remove clauses, or to adjust the content of the agreement where necessary. Make sure that the modifications you make do not interfere with the purpose of the document and are in line with the general terms of other boat purchase agreements.
It is also important to communicate with the buyer , seller, agent and anyone else that is involved in the transaction during the customization process. You should all be on the same page when it comes to the details of the agreement, including the final price of the boat, deposit amount, contingencies, closing date, accepted method of payment and any other issues that may arise during the process of customizing the agreement.
In addition to communicating with all parties involved, utilize a template from a reliable source such as the United States Coast Guard. A boat purchase agreement template from a reputable source can be customized as needed without worrying that the base document will not suit your individual needs.
There are numerous legal considerations that should be kept in mind when customizing a boat purchase agreement template, which is why discussing the document with an attorney and your real estate agent is so important. Both a lawyer and a real estate agent can offer valuable advice that will help you make your boat purchase a good investment.
Legal Requirements for Using a Template
While utilizing a standard boat purchase agreement template can save time and help ensure all the essential elements are covered, it’s important to be aware of the legal considerations before you complete the process. Each state has unique regulations surrounding the sale and purchase of a boat. Your selected template should meet your state’s specific requirements and any local rules that apply. For example, in California, a Vessel Bill of Sale must include the document number and title number of the vessel. These numbers are used to identify the vessel, and if they’re not filled correctly, it may cause delays for the new owner when registering the vessel. Above and beyond your state’s laws regarding the sale of a boat, there are certain federal laws and regulations to consider as well. First, if your boat is powered by an engine and the engine was built after July 1, 1973, you will need to be aware of the EPA regulations for the emission of air pollutants from your vessel. Complying with standards set by the EPA are essential of your boat is to be able to be legally sold and registered with the state. An understanding of these requirements is also essential in order to protect yourself from liability down the road. Whether you’re purchasing or selling your boat, it’s a good idea to review any agreement with your legal professional, especially if your boat has a lien. For both buyers and sellers, it’s essential that you clearly understand the language of the document and that you know what rights you and the other party have. In some cases, as in sales involving a vessel with a lien, the lender must approve the proposed purchase agreement. Having your attorney review the agreement will help to ensure that it will stand in court if it becomes disputed.
Sources for Boat Purchase Agreement Templates
Reliable and professional boat purchase agreement templates can be found in several places online. However, it’s important to exercise caution and do thorough research before downloading any template, as there are many unreliable or incomplete templates available.
First, online legal service websites often provide a wide range of customizable legal forms, including boat purchase agreement templates. Websites like Rocket Lawyer and LegalZoom offer a variety of templates that can be easily customized and downloaded. However, be sure to check if a subscription is required and if features like customer support are included in that subscription.
Second , legal blogs and law firm websites may provide free or low-cost boat purchase agreement templates as downloadable PDFs. These templates are often designed by experienced attorneys and may also provide useful tips or commentary on the boat purchase process. Be sure to verify the credentials of the website or blog author before using the template.
Third, state and local boating or water sports associations may offer downloadable boat purchase agreement templates for their members. Check the websites of regional non-profits and recreational clubs for their member benefits. These templates are often more likely to follow local state or federal laws and can provide guidance on writing your own purchase agreement as well.
Finally, you could also consider purchasing a professionally written boat purchase agreement from a legalforms company. These companies typically offer forms relevant to their jurisdiction, but it’s always best to check with your local laws or an attorney before relying on these.