Selling a boat - acknowledged defect - double reduction / contract cancellation ? Is this fair / legal

[jfm]

This thread is becoming bizarre!

 

[Refueler]

This thread is becoming bizarre!

No - it just got off track by some misreading the original post.

Anyway - its run its course - OP has many answers to sift through ... good and bad ... its his 'pot' now ..

 

[PaulRainbow]

This thread is becoming bizarre!

Becoming ?

 

[Seastoke]

Just hope SeaStoke doesn’t join in !!!!

 

[jfm]

Becoming ?

 

[ari]

Reading this a couple of times makes me wonder why the buyer signed a deal, THEN had a Survey. It strikes me the wrong way round for an expensive purchase. I would suggest the buyer loses gis Deposit unless

Reading the OP a couple of times, what strikes me is why would the buyer sign and then have a surveyor look at it. It seems the wrong way round to me. Unless the Contract says something like 'Subject to Survey', surely the buyer would lose any deposit paid if they walked away from the deal.
And stop calling me Shirley!

The original post said:

A standard style sale contract was then signed by both parties. This provided the buyer the right to withdraw for an undisclosed and significant defect being discovered at survey.

Signing a deal subject to survey is an entirely normal way to buy a boat, done it many times myself. Why would you go to the expense of a lift out and survey without having a signed agreement with the vendor?

 

[Refueler]

Still ignoring the statement they agreed defect before contract ... which is why Seller is arguing ...

Blimey - is it that hard to understand ??

You do not agree defect and costs applicable BEFORE survey ... blimey !!

 

[Tranona]

Still ignoring the statement they agreed defect before contract ... which is why Seller is arguing ...

Blimey - is it that hard to understand ??

You do not agree defect and costs applicable BEFORE survey ... blimey !!

Well, you do actually. That is the whole point of carrying out your own due diligence before making an offer. The buyer identified work needed on the teak decks and set his offer based on that - lower than asking. Vendor agreed and accepted offer. Where this one seems to have gone wrong is that the contract did not exclude the decks from the survey. See my post#20 where I agreed that only the hull would be subject to survey - and indeed it did show faults allowing me to withdraw. The survey also showed some issues with other items but I would not have been able to withdraw on the basis of these.

 

[PaulRainbow]

Still ignoring the statement they agreed defect before contract ... which is why Seller is arguing ...

Blimey - is it that hard to understand ??

You do not agree defect and costs applicable BEFORE survey ... blimey !!

Of course you can, you can agree whatever you both want.

When i bought my current boat there were a number of apparent defects when i first looked at it. I made an offer for less than the asking price, based on the cost of rectifying those defect. BUT, still subject to survey and sea trial. The off was accepted and the survey booked. A couple of additional items came to light during the survey and a further reduction was made, still subject to sea trial. Sea trial went OK and payment was made.

With my previous boat i made an offer, subject to survey and the seller accepted, but stated that no further price reduction would be made after the survey. Survey turned up a couple of minor issues, which i accepted and paid for the boat.

It would be most unusual (and pretty stupid) to arrange a lift and survey before making an offer and entering into a contract. Without a contract the seller could, for example, decline any offer you then make, or he could take offence and refuse to sell it you, or sell it to someone else while you are waiting for the surveyor to send you his report etc etc.

 

[jandnrowe]

It just goes to show we all have different experiences.
When I bought ours we agreed a price, but the deposit WAS returnable if something major showed up. The Survey was down to me to stand, and it showed a couple if issues which the seller allowed in his reduced sale price.
Both happy and broker got his cut.

 

[ari]

Well, you do actually. That is the whole point of carrying out your own due diligence before making an offer. The buyer identified work needed on the teak decks and set his offer based on that - lower than asking. Vendor agreed and accepted offer. Where this one seems to have gone wrong is that the contract did not exclude the decks from the survey. See my post#20 where I agreed that only the hull would be subject to survey - and indeed it did show faults allowing me to withdraw. The survey also showed some issues with other items but I would not have been able to withdraw on the basis of these.

Exactly. You make your offer based in the general condition of the boat as you see it. You don't look at (say) a dilapidated boat and think 'I'll offer as though it were in perfect condition and THEN make a reduced offer following the survey'.

You offer based on what you see, but subject to a satisfactory survey. If the survey throws up issues that you were unaware of, or highlights that issues you were aware of are, in fact, far worse than you imagined, then you renegotiate or you walk away.

Precisely what happened here. It's not complicated.

 

[jfm]

Yup. It’s VERY not complicated

 

[Refueler]

I do not disagree with you Paul ... but the OP as read indicates a firm agreement on one defect before the survey ...

The comment about contract is 'wooly' as it says any further defect ...

I do not read that Buyer and Seller agreed ALL defects subject to survey ...

Why would seller be arguing - if the survey included modification of the initial agreed defect ?

Trouble here is we only have one side of the matter - even though the OP is quite extensive in info.

I deal with Survey reports every day ... they may be for Ships cargoes and condition - but the basis of how a survey is agreed to and conducted does not alter. If I have to take OP as the only evidence - it appears that Seller has a foundation to his rejection of Surveyors report. Regardless of whether findings are correct or not.

 

[Refueler]

Well, you do actually. That is the whole point of carrying out your own due diligence before making an offer. The buyer identified work needed on the teak decks and set his offer based on that - lower than asking. Vendor agreed and accepted offer. Where this one seems to have gone wrong is that the contract did not exclude the decks from the survey. See my post#20 where I agreed that only the hull would be subject to survey - and indeed it did show faults allowing me to withdraw. The survey also showed some issues with other items but I would not have been able to withdraw on the basis of these.

Sorry but that does not make sense ... the problem IS the deck from what I understand. Initial agreed defect and cost deduction. Survey then agreed to - for any further defects ...
Survey apparently identified greater extent of deck defect and greater cost to rectify ... which as I read - Seller rejects as having already agreed before Survey costs etc.

The defect should have been included PROVISIONAL but non-binding agreement subject to survey .. which appears to have not been the case.

Of course even I would discuss before survey - but I would never agree extent and costs before survey ... both would be left open for investigation and evaluation after survey. Ideal with multi-million $ cargoes ... if I did as apparently happened with OP .. it would be disastrous ..

 

[Seastoke]

Sorry but that does not make sense ... the problem IS the deck from what I understand. Initial agreed defect and cost deduction. Survey then agreed to - for any further defects ...
Survey apparently identified greater extent of deck defect and greater cost to rectify ... which as I read - Seller rejects as having already agreed before Survey costs etc.

The defect should have been included PROVISIONAL but non-binding agreement subject to survey .. which appears to have not been the case.

Of course even I would discuss before survey - but I would never agree extent and costs before survey ... both would be left open for investigation and evaluation after survey. Ideal with multi-million $ cargoes ... if I did as apparently happened with OP .. it would be disastrous ..

Can you stop putting Fuel on the fire.

 

[ylop]

I do not disagree with you Paul ... but the OP as read indicates a firm agreement on one defect before the survey ...

And yet the very fact the putative buyer then wanted to renegotiate the price based on the results of the survey would suggest that the missing side of the story doesn’t accord with this interpretation.

Why would seller be arguing - if the survey included modification of the initial agreed defect ?

Why would the buyer be rejecting if he didn’t think it entitled him to? The OP could clear it up with the exact wording that was disclosed in writing and that used in the revised offer.

Trouble here is we only have one side of the matter - even though the OP is quite extensive in info.

Not that extensive, he’s not provided the actual contract words that describe the exclusions has he?

I deal with Survey reports every day ... they may be for Ships cargoes and condition - but the basis of how a survey is agreed to and conducted does not alter.

I’d beg to differ! This thread alone tells you that there are variations in what is “normal” and that is just considering consumer purchases mostly in the U.K. there are at least two versions of the standard contract used by brokers in the U.K. - both involve agreeing the purchase price if the survey is good and paying the deposit before the survey. You seem to be repeatedly arguing that this should never be done and survey before price discussion.

If I have to take OP as the only evidence - it appears that Seller has a foundation to his rejection of Surveyors report. Regardless of whether findings are correct or not.

Assuming this is the British Marine “standard” contract the buyer is entitled to reject the boat or propose the seller can repair the boat or propose a price reduction. If he does either of the latter the seller has the option to comply but if they don’t agree within a set time the offer simply lapses and deposit is refunded. The standard contract doesn’t really provide a mechanism to reject the survey. The only question here is if the exclusions/disclosures were sufficiently clear and well documented and the definition of material defect. But if those aspects were 100% crystal clear - I’d suggest the OP would have been talking to his Broker and possibly either the BMF arbitration scheme or his lawyer not asking a bunch of old farts who haven’t seen the boat or the paperwork.

I’ve been in enough contract disputes in my life to know that what people think contracts say and what was actually written down are often not the same thing, and even when you are right it’s often not worth the emotional effort of enforcing it.

My guess is the Broker doesn’t think the buyers position is unreasonable? Obviously brokers have better things to do than get in the middle of disputes so would rather move on to a quick, actual sale, but if they thought the OPs case was rock solid presumably they’d retain the deposit and make the buyer jump through hoops to get it back.

 

[ylop]

Of course even I would discuss before survey - but I would never agree extent and costs before survey ... both would be left open for investigation and evaluation after survey. Ideal with multi-million $ cargoes ... if I did as apparently happened with OP .. it would be disastrous ..

I doubt the terms of cargo survey / acceptance / price revision between major international companies who probably want ongoing business relationships are going to be identical to consumer to consumer boat sales using a broker and involving the payment of a deposit!

Not sure if your cargoes are quite as subjective as boat values - which a bit like house prices are emotional rather than commodity prices, although perhaps it’s sometimes easier to walk away from a house/boat that makes you feel uneasy than a major shipment that becomes a production bottleneck. Logical calculations seem much more fitting in that case than, let’s face it if any boat buyer applied such financial rigour none of us would own boats!

 

[Tranona]

Sorry but that does not make sense ... the problem IS the deck from what I understand. Initial agreed defect and cost deduction. Survey then agreed to - for any further defects ...
Survey apparently identified greater extent of deck defect and greater cost to rectify ... which as I read - Seller rejects as having already agreed before Survey costs etc.

The defect should have been included PROVISIONAL but non-binding agreement subject to survey .. which appears to have not been the case.

Of course even I would discuss before survey - but I would never agree extent and costs before survey ... both would be left open for investigation and evaluation after survey. Ideal with multi-million $ cargoes ... if I did as apparently happened with OP .. it would be disastrous ..

You keep on missing the point - or rather rehashing what happened - we don't know what was actually agreed prior to the offer being accepted. The fact that a "standard" contract was used suggests that the pre offer agreement was not written in. This led to the post survey dispute.

The idea of "provisional" is your own construct which would likely not have avoided a dispute. The only way of making the acceptance of the deck "as is" for the offer price stick is to have it in the contract - that is excluded from the survey as the buyer has already accepted responsibility for the repairs to the deck.

 

[Refueler]

You keep on missing the point - or rather rehashing what happened - we don't know what was actually agreed prior to the offer being accepted. The fact that a "standard" contract was used suggests that the pre offer agreement was not written in. This led to the post survey dispute.

The idea of "provisional" is your own construct which would likely not have avoided a dispute. The only way of making the acceptance of the deck "as is" for the offer price stick is to have it in the contract - that is excluded from the survey as the buyer has already accepted responsibility for the repairs to the deck.

Your post convolutes what I have been saying all along - if you take out your ducks and dives - we are nearly saying same.

Post already says that an agreement was made BEFORE contract ... that's my whole point ...

I think some need to go back and read OP slowly .. remind themselves what its content is. Not what some seem to think it has after many posts 'bending ' its content.
Sadly too often such veering off 'path' is all too common and original posts get further from base for later posts ...

Verbal or otherwise - Seller obviously is not happy that an agreement then was in question based on what they considered 'over-zealous' survey results.

Provisional is NOT my own construct ... if anyone discusses defects / costs prior to a survey - then it should be only provisional to allow for later negotiation ...

 

[Refueler]

I doubt the terms of cargo survey / acceptance / price revision between major international companies who probably want ongoing business relationships are going to be identical to consumer to consumer boat sales using a broker and involving the payment of a deposit!

Not sure if your cargoes are quite as subjective as boat values - which a bit like house prices are emotional rather than commodity prices, although perhaps it’s sometimes easier to walk away from a house/boat that makes you feel uneasy than a major shipment that becomes a production bottleneck. Logical calculations seem much more fitting in that case than, let’s face it if any boat buyer applied such financial rigour none of us would own boats!

My using my work of reports and surveys every day - is not about the product or material - its the relationship and interpretation of the survey ....

Whether its boat buying or verrification of Volume and Quality ... care must be taken in conversations / agreements before contracts / surveys.

Example : Party A talking to Party B says they can do XX but no g'teee outcome is as per Party B's expectation. Party A conducts the survey and finds more serious situation that is not in agreement with Party B's expectation.
Guess what ... Party B conveniently 'forgets' Party A's statement that they cannot g'tee outcome to be as Party B's expectation. Party B insists on their part.

Just an example of how disputes can arise ...