Advise sought on completing sale

[gsh1]

I have recently accepted an offer for my boat from a dutch chap and I would like to ask the forum's opinion as to whether he is being reasonable with his terms.

We have agreed on a price period. He performed his own survey when he viewed the boat and so his offer is not subject to any further actions.

He is having a contract drawn up for us both to sign at which time he has suggested paying 10% deposit.

He is then proposing paying 50% before he comes to collect, and then the remaining 40% on collection.

The time frame for this is 5 to 6 weeks because he can't come to the UK to collect before this. He is also asking me to move the boat from the currrent boat yard (ashore) to the local marina because he doesn't like the look of the boatyard.

Is he being reasonable in his request? I ask because my initial reaction is that he is drawing out the process to suit his needs. As there is nothing he is waiting for before taking ownership, what is the forum's opinion of a fair timescale.

Your thoughts would be appreciated.

Graham



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[snowleopard]

cleared funds

make sure you get a banker's draft or equivalent before letting go of the boat. if it is a draft on a foreign bank, take it to your bank and ask them to verify it is not possible for it to bounce or be stopped.

i would suggest that he pays the marina fees.

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[Observer]

The "business terms" appear very reasonable. 10% on signing, 50% before delivery, 40% on delivery represents a substantial commitment on the buyer's part before you're being asked to surrender possession. 5-6 weeks for completion is also not unreasonable particularly where, as in this case, the buyer is an overseas resident (at least that's what I infer if he is Dutch nationality).

The stipulation to have the boat moved is all down to negotiation and the cost relative to the sale price. If you achieved your asking price, or close to it, it doesn't seem too onerous - especially if your buyer (assuming again he is non-UK resident) intends to export the boat under its own power.

As recommended in earlier post, you should insist on final payment in cleared funds before delivery.



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[oldsaltoz]

G'day qsh1,

And, welcome to the YBW forums, (first post) I'm sure you will get the answer to this and many other questions, and a bit of banter no doubt.

First things first, you don't have a contract or a deposit yet, so you are under no obligation to do, or stop doing anything.

Snowleopard and Observer (above) have given good advice re payment and conditions.

You don't say what your boat is or indicate what price range, these could have a bearing on any future answers. Keep us informed on how it's going, no doubt we have readers who have been ripped off and know the pitfalls you now face.

Andavagoodweekend. Old Salt Oz /forums/images/icons/cool.gif





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[duncan]

suggested reading is thread in the name of deposits on MoBoChat recently by barryH but the crux of your requirements revolve around the fact that you are entering into a contract to sell your boat to another party and he to complete the purchase with you. Ideally both parties have the same understanding of what would happen if but it doesn't always happen that way!
Some specifics - I do not understand why he proposes to differentiate between the 10% deposit and the 50% payment before he collects . For his purposes he will wish to pay the minimum that he might forfeight or otherwise should he pull out of the sale and for yor part you will wish to be fully covered for your costs should he do so - in this case advertising costs, use of the boat within the 5-6 week period, cost of moving it to the new venue (and back again!), storage at the new venue over the agreed period, notification to insurers, and thats befoe the potential impact on your new purchase - and I am sure there are more!
time is clearly of the essence (see much discussion in previous post) and you should accept a deposit to cover all the above, undertake the agree actions you will take, and have written into the contract that you can use the deposit against the above costs and walk away from the sale if he fails to complete.
Would recomend you consider a standard contract - must be one on the web somewhere - RYA? Law Society? - maybe a new service for Kim to provide?????

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[Peppermint]

Has your boat been for sale long.

If you havn't got a queue at the door for it, it's worth trying to make this work.

The whole thing relies on verifying the final payment and there is a case for questioning two points.
a. is the first two payments setting you up for a sting on the third stage. This would net the buyer a fair discount.
b. is the purpose of the relocation to facilitate the easy removal of the vessel from home waters before you find out you've been stitched up.

I don't know the numbers involved but if the value is high the reward for the fiddle is great.

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[Sybarite]

I tend to agree with Observer. I don't think his request is unreasonable.

Just one caveat: recently there have been some instances on the continent of forged bankers' drafts. You should get your bank to phone his to get on the spot comfort.

John

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[davidwf]

Best to get him to do a telegraphic transfer from his bank to yours. You can then ring up your bak on the day and confirm the funds are in your account.

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[PeterGibbs]

Your main concerns are surely whether he will complete the transaction, and if not, assuming you have incurred movement expense, whether you will recover your costs. To which, I see he is prepared to pay 10% deposit up front. This should surely cover all risks to you. On this basis I would proceed.

Incidentally, it is clear he is buying as seen without reservation, so technically the deal is done. If you are happy with the price what other worry is there?
I would add that it would be more normal to pay the balancing 90% on safe delivery, rather than a stage payment, so you would be in an even stronger position with half paid before the buyer is even back in the country! Just make it plain that you will recover costs if he does not complete - best to be upfront about your intentions.

PWG



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[AndrewB]

Yes ... its good.

I'm a great believer in drawing up a purchase contract for a private sale. The RYA put out a model form which you might wish to check his proposal against. That includes allowance of up to about 2 months for completion, including survey, sea-trials, and the opportunity for the purchaser to undertake what checks he feels necessary to establish your title to the yacht.

As you've accepted the offer a contract now exists and legally you can't back out provided he fufils his side of the bargain.

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[Observer]

Binding contract or not?

AndrewB is right if your buyer has made an offer (including the terms as you indicated) which you had accepted: (offer + acceptance = binding conttract) and there is nothing else agreed between the parties. However, the fact that your buyer has proposed (and I assume you have agreed) that there should be a written contract makes it possible that you and buyer have merely agreed a sale "subject to contract". This is, in legal jargon, an "agreement to agree" and is NOT contractually binding on either side. (This is how contracts for the sale and purchase of property work in England and Wales - NOT Scotland.)

On the other hand, it may be that a binding oral contract has been created and you and buyer have merely agreed to subsequently record the terms and conditions of that contract in writing.

Which of the two possibilities applies depends on the intentions on both sides and the statements actually made on either side. Generally, a party can't be bound to a "contract" unless at the time it was made (or purported to be made) he intended to be bound. It is necessary for BOTH parties to have the intent to be bound - just one is insufficient.

I also recommend a written contract (ideally at the time the contract is made). The RYA does publish a model form (available to members as a download on its website). Whether it is appropriate or not in your case is hard to say. From what you've described, I suspect it would need some modification.

Finally, value should have a bearing on the type of contract indicated. For me, in connection with the private sale and purchase of a boat, if the price is (say) £20,000 or so, a simple form would be adequate. If the price is (say) £50,000 or more, I would want a more complete form. In the latter case, I would start with the RYA form and modify it as necessary to meet the circumstances.

Post again if you have other doubts.

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[PerL]

Re: Binding contract or not?

In addition to the above posts, there's also the issue of applicable law. (If I understand the situation correctly.) If nothing is stated about applicable law or nationality of the court (these are not always the same), the International trade laws apply (..and they have a name that I have forgotten, SSI or something...) otherwise the court and legal system stated in the contract will apply. This can be for instance "South African laws apply and conflicts will be settled in a Swiss court." (Only lawyers tend to use more words...)

If I remember correctly, the international trade laws says that conflicts will be solved in the country of the person being sued.

Anyway, you probably shouldn't worry about this unless the buyer includes in the contract that Dutch law applies and any conflict will be settled in a Dutch court. It is a substantial disadvantage to be a foreigner in court.

Have recently bought a boat in Germany under german law, I decided to agree with this since the broker has a good reputation and seems to know what he's doing. But it is a calculated risk and - as such - have a negative impact on the price.

Please correct me if I am wrong since I've sort of put my money where my mouth is already...

/Per



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[Observer]

Law and jurisdiction

The legal considerations on governing law and jurisdiction where a contract is silent on those matters (and, sometimes, where they are agreed in writing) can be quite complex.

From a business perspective, it seems to me to be more likely that a buyer will seek contractual or other remedies against a seller than vice versa. Therefore, unless there are good reasons to the contrary, it seems sensible that applicable law and jurisdiction should follow the seller's place of residence.

If otherwise, the problem that is likely to arise is that a buyer obtains judgement in his chosen/home jurisdiction and then has to take the judgement to the seller's jurisdiction in order to obtain enforcement (and perhaps to have the judgement recognised before enforcement). Not a very happy situation if buyer has already gone throgh the pain of proceedings in his chosen/home jurisdiction.

It follows, of course, that a UK person buying under non-UK law and jurisdiction should seek to inform himself of the legal implications of doing so, which may require taking professional legal advice. This is probably more important where buying from a private person (in another EU country) than a business because consumer law is, I believe, reasonably robust, if not uniform, across the EU.

I'm well out of my depth at this point so can't offer reliable advice.

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[webcraft]

Re: RYA model form

Anyone have a copy of this?

If so please PM me as I would like to get a look at it before this weekend.

- Nick
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