Syndicate Agreement Legal Question

rafiki_ said:
I read it that the party wishing to leave the syndicate has 6 months to sell their share, and covers the cost of that sale. If the share not sold in 6 months, then the other 2 parties buy the share or if they don't want to do this, the boat is sold and the 3 parties share the sale proceeds.
Click to expand...
Rafiki that is an eminently sensible formula but it is absolutely not what the words say.
 
As a complete legalese moron here, why cant contracts for the layman be laid out as simply as Rafiki has written in simple unambiguous words and short sentences that everyone understands and leaves nothing for rebuttal.
 
BruceK said:
As a complete legalese moron here, why cant contracts for the layman be laid out as simply as Rafiki has written in simple unambiguous words and short sentences that everyone understands and leaves nothing for rebuttal.
Click to expand...

Lawyers need yachts too
 
Because it truly isn’t that simple.

(1)What if one sharer out of three doesnt sign a bill of sale for his 1/3 rd share on the day of handover of the boat to the buyer? Maybe for reasons of bad behaviour, maybe unconscious with illness, or maybe in divorce and lawyer advises him not to? What then do the other 2 sharers do, and should they suffer?

(2) What if 2 sharers buy out the third, then a year later a fine/bill arrives for a diesel pollution incident 18 months prior when the boat was shared by 3 not 2? Does the exiting ex 1/3rd sharer pay or not?

That’s why you need a PoA clause (1) and might not want give the RYA blanket indemnity (2), and so immediately you are in some complexity.

The answer isn’t to have simple terms that go no deeper than rafiki’s post. The answer is to have many clauses going deep and covering every eventuality but well written. So that they may look a bit complex at first sight, but when read carefully they provide total clarity of the “rules” for any situation. The very opposite of that RYA rubbish.
 
If someone wants to sell their share,but it does not sell in the given time, and the other two can’t afford it, it seems wrong that they could become boat less through a forced sale.
 
seastoke said:
If someone wants to sell their share,but it does not sell in the given time, and the other two can’t afford it, it seems wrong that they could become boat less through a forced sale.
Click to expand...

That's what they signed up for though. If you want total autonomy about your boat ownership - don't buy into a boat share.
 
As you might say, 'if you want to get to there, I wouldn't start from here'.

Before going into any contract it's important to know (a) what you want to get out of it and (b) what your exit looks like. If your answers are (a) happiness and (b) don't be so negative, then you will either get lucky or you won't.

The first difficulty with the quoted wording is that it's not aimed at giving anyone what they actually want.

The second difficulty is the portmanteau phrasing. There are so many conflicting ideas rubbing up against each other that it really is anyone's guess what it means. One idea per sentence, please.

Apart from that critique, I agree entirely with jfm. It's a fairly damning indictment that we are on #30 and all of us above average intelligence. :D Yet no-one knows what this means.

If it's not too late, I would be tempted to go back to the syndicate and design a clear exit so that, if anyone wants out, they actually know what is possible and how to achieve it.

Mind you, if you really want obscurity and obfuscation you could always try exiting a family trust over French real estate. Suffice it to say I have the t-shirt. It says 'Speak to me, Goose' on the front.
 
rafiki_ said:
I meant myself Bruce:D
Click to expand...

Me too :encouragement: I can appreciate the value of a good lawyer if it takes away the stress or niggling worries in a complex entanglement. I just want to know my exact stand point and let others do the worrying. Worth every penny then.
 
I know a few people who have been through owning sailing boats in syndicates, for racing.

I think the principle is something like: you buy a boat, you can easily lose 1/3 of the value if you decide to sell at the wrong time.
Plus it's a money pit in maintenance.
So if you only buy a third in the first place, anything you get back is almost profit.
It works if you get your value from using the boat, not by viewing it as a capital asset.
 
Pete I think Bjb (who is a proper high end lawyer) is in same place as me, but being more eloquent and polite as ever. That RYA document is truly awful.

Here’s another illustration. I think you are in a 3 way syndicate. If C wants to leave while A and B stay, you don’t want to terminate the agreement, obviously. You want it to continue as respects A&B and for C to have certain rights and obligations ended. To achieve that you would never talk of the agreement being “terminated”. Unless you’re RYA.

So my point is that why don’t the three of you create an amended and restated agreement, and ditch the RYA thing? You can do it yourself and post here for comment and mark up. You’ll then have a nice agreement ready for D (the new C) to sign up to.
 
Last edited:
To be blunt, you have to allow for the situation where C wishes to leave because A&B have turned out not to be great people to be in a syndicate with. His share is unsaleable because buyer D realises this. A&B don't wish to buy out C's share.
There may be other situations where the best way for C to get his capital out is to wind up the syndicate, forcing a sale.
Nohing to stop A&B creating a new syndicate at that point. With or without other members.
 
lw395 said:
To be blunt, you have to allow for the situation where C wishes to leave because A&B have turned out not to be great people to be in a syndicate with. His share is unsaleable because buyer D realises this. A&B don't wish to buy out C's share.
There may be other situations where the best way for C to get his capital out is to wind up the syndicate, forcing a sale.
Nohing to stop A&B creating a new syndicate at that point. With or without other members.
Click to expand...

Thanks, makes perfect sense.
 
jfm said:
Pete I think Bjb (who is a proper high end lawyer) is in same place as me, but being more eloquent and polite as ever. That RYA document is truly awful.

Here’s another illustration. I think you are in a 3 way syndicate. If C wants to leave while A and B stay, you don’t want to terminate the agreement, obviously. You want it to continue as respects A&B and for C to have certain rights and obligations ended. To achieve that you would never talk of the agreement being “terminated”. Unless you’re RYA.

So my point is that why don’t the three of you create an amended and restated agreement, and ditch the RYA thing? You can do it yourself and post here for comment and mark up. You’ll then have a nice agreement ready for D (the new C) to sign up to.
Click to expand...

Thanks that's very generous of you and could be useful for others.

Will put something up for review as soon as I get time.
 
lw395 said:
To be blunt, you have to allow for the situation where C wishes to leave because A&B have turned out not to be great people to be in a syndicate with. His share is unsaleable because buyer D realises this. A&B don't wish to buy out C's share.
There may be other situations where the best way for C to get his capital out is to wind up the syndicate, forcing a sale.
Nohing to stop A&B creating a new syndicate at that point. With or without other members.
Click to expand...

Which is what I twigged in post #4 .
 
You must log in or register to reply here.

Share this page

Top