Suggestion of Wording on an Offer

[Jd1]

I am about to write an offer on a Catalina 36 Mrk II. The contract is a pretty standard one used here in BC and I am happy with everything I see but I would very much like to add one clause to this contract and I do not want to go and ask a real lawyer. I am a bit stumped on exact wording and wonder if anyone has had a similar contract clause that I can borrow.
Specifically this extra clause will say the following:
Vendor declares that according to his knowledge the following statements are true:
a)The vessel being offered has never been used in charter service,
b)The vessel being offered has never had any damage exceeding $10000 Canadian,
c)The vessel is in seaworthy condition and vendor is not aware of any impairments,conditions or faults that would require repairs over $5000 in total.

It is the part 'c' that I have trouble with. What I am basically trying to do is cover my behind in case the vendor knows, is hiding or is not completely forthright about a defect in the boat that is 'major'. Since 'major' is a relative term it is useless in a contract and I certainly don't want to cover minor maintenance issues in this clause. On the other hand if there is a major issue that the vendor is aware of and is hoping it is missed in the survey then I want him to think twice about hiding the defect.

I hope that makes some sense ..... suggestions are solicited !

[David_Old_Jersey]

I am not a lawyer so won't attempt to write something for you, albeit I have done self-penned amendments for similar over the years - the approach I use is simplicity for the sake of clarity (i.e. the less words the better and not full of thereofs and quasi legal terms to pad things out to "look better").....in practice any risk that what is written is not as legally defendable as wot a lawyer would write is far outweighed by the cost (nadda!) and that once something is written down folks do tend to stick to an agreement (even if sometimes they need memory jogged!).
So far, so good - but that of course no guarantee for the future - for me, let alone you!

Having said that, am not talking about stuff where there is squillions involved (for that a Lawyer is useful to have, if only for their PII insurance!) or where the bits I am messing with go to the heart of the agreement.....IMO (worth nadda!) what you are seeking to do fits in with that.

In the past I have asked pretty much the same questions of the Vendor before buying boats (except the charter bit, as not appropriate!) - just never put it into the contract, to be honest your approach does make more sense (but just make sure that the Vendor is also asked the questions - as many (most?!) folks don't actually read contracts!).......I also have made clear that if they disclose something now it is not automatically a deal breaker, just would be priced into the offer (in practice might be a deal breaker - but no need to say that!) - something that is discovered later (which IMO the Vendor would have known) would be viewed very unfavourably as also an indicator that the person likely hiding other stuff which I have not discovered.

Anyway, the above mostly a long winded way of giving you a free thread Bump .

[Factor]

What you are trying to achieve is entirely appropriate. Its actually in our standard brokerage boat contract as a duty to disclose.

[David_Old_Jersey]

Oh f#ck it, lets have a go!

Originally Posted by Jd1

Vendor confirms declares that according to his knowledge the following statements are true:

a)The vessel being offered has never been used in charter service for commercial charter purposes,

b)The vessel being offered has never had sustained any damage where the cost of repairs exceeding exceeded $10000 Canadian,

c)The vessel is in seaworthy condition sufficient to conduct a full sea trial.

d) and The Vessel vendor is not aware of does not have any damage impairments, conditions, or faults or any other impairments that would require repairs over $5000 Canadian in total except as previously disclosed in writing to the Purchasor.

[RigelKent]

I'd suggest arranging for two surveys: the first (in and out of water), then requiring repairs or re-negitiations based on the first survey, then a second survey to confirm the quality of the repairs (perhaps have the surveyor also attend the sea trial immediately following). Oh yeah, get a rig inspector and and engine inspector involved in the first survey. Then it's seaworthy.

p.s. I'm no expert and if I were to purchase again I'd make the arrangements above the next time.

[tamicatana]

I'll second both DOJ and Rigel, that is to say: put the verbiage in the contract, and get a damned good survey.

Here's the thing: if an owner is a jerk, he's going to hide the problems regardless of the contract, 'cause he's crooked and thinks he'll get away with it. If he's not, then the contract makes no difference 'cause he'll be forthright. Either way, your ace in the hole is a DAMNED GOOD SURVEY. Did I mention you need a REALLY good surveyor?

[David_Old_Jersey]

Originally Posted by tamif27

I'll second both DOJ and Rigel, that is to say: put the verbiage in the contract, and get a damned good survey.

Here's the thing: if an owner is a jerk, he's going to hide the problems regardless of the contract, 'cause he's crooked and thinks he'll get away with it. If he's not, then the contract makes no difference 'cause he'll be forthright. Either way, your ace in the hole is a DAMNED GOOD SURVEY. Did I mention you need a REALLY good surveyor?

I agree with you on the survey. But what I think OP is trying to avoid is wasting good money on a survey to find things that a Vendor would have known.

I also agree with you that someone who is determined to hide stuff won't mention anything (no matter what the contract says) - but most people when put on the spot will be honest (well, fairly!), the contract alone won't neccessarily do that but the act of putting in the amendments and raising these points specifically will. And to be fair(?!) everyone's ideas of what should be disclosed can vary for genuine reasons - assumptions don't always match, being specific helps both sides.

The side bonus with a dishonest Vendor is that the Survey can get stopped ASAP if Surveyor starts finding stuff that a Vendor should clearly have disclosed, as a big red flag that he is trying to pull a fast one.

[Curmudgeon]

David Old Jersey's markup is fine. Use it.

[Jd1]

Thanks guys (especially DOJ)!! Great info!
Just for the record, the contract includes survey, rigging survey, engine survey and sea trial. Vendor has confirmed the charter issue and damage issue in writing but the contract includes wording to make communication outside the contract useless so it needs to be carried into the contract.
The bit about hidden damage is simply to cover my behind as I have read too many stories here about surveys missing important stuff.

[David_Old_Jersey]

Originally Posted by Jd1

Thanks guys (especially DOJ)!! Great info!
Just for the record, the contract includes survey, rigging survey, engine survey and sea trial. Vendor has confirmed the charter issue and damage issue in writing but the contract includes wording to make communication outside the contract useless so it needs to be carried into the contract.
The bit about hidden damage is simply to cover my behind as I have read too many stories here about surveys missing important stuff.

+1 on actually reading the contract
+2 on understanding it

IMO / IME the other side simply knowing that helps in never needing it

[Stumble]

I actually am a lawyer, but the following should not be construed as legal advice. I am not authorized to proactive in your jurisdiction, and decline any warranty to the following.

At least in Louisiana, the part you are missing is the word "warranty" as in "seller warranties that there are no defects in the boat that will cost more than X to repair at the time of the sale."

At least here the process of collecting on a warranty is much, much faster than on a contract. A warranty I can get a judgment and writ to seize assets in about 30 days, a breach of contract claim may take years.

Of course your mileage may vary.

[Jd1]

Thanks Greg! I just sent the offer so the deed is done. I will keep your suggestion in mind for the next time if there is a next time.

[youmeandthed]

Look at the cost of the boat vs the cost of litigation to enforce such clauses in the contract. "Caveat Emptor", the clause is in "good faith". you would have to prove that the previous owner knew these things. It is Canadian Law not,"lets sue everyone" US law. If the previous owner denies the fact they knew these things it is up to you to prove they did know, not that they just happened. The vendor gets a quote for the repair under $5000 and the contract still stands, define "damage" every boat after 10 years has accumulated at least $10000 in repairs. Show me any used boat and I could spot $5000 in repairs needed. These are not reasonable clauses like standard ones: the vendor owns the boat with clear title, the buyer can have the boat looked at by a surveyor and can walk away if they are not satisfied with the results. But if you don't know the answer to these clauses before going into contract you will have already signed the dotted line, no way out at that point.

I wouldn't waste my time worrying about it, do diligent research before buying the boat if these things concern you. They are trumped by statue, precedent and that funny little bit of Latin 'Caveat Emptor"

[youmeandthed]

Read this if you are worried.

Cost vs reward, legal action may be more expensive than selling the boat and cutting your losses.

[David_Old_Jersey]

Originally Posted by youmeandthed

the buyer can have the boat looked at by a surveyor and can walk away if they are not satisfied with the results. But if you don't know the answer to these clauses before going into contract you will have already signed the dotted line, no way out at that point.

No idea about Canadian Law - but would seem very strange that a contract could not set conditions to complete a purchase (of anything) - otherwise no real point to having any contract . (I am ignoring whether the amendments are legally valid for the purpose intended!).

Certainly when it comes to boat buying I would want something in place before paying out for a Surveyor so that the boat could not be sold from under me......and the ability to back out if the Vendor was trying to sell me a pig in a poke.

On that latter note, I always favour the practical end of the matter when it comes to disputes - no substantial deposit in someone else's possession and a legal avenue to use, even if open to dispute.......... and a willingness to either see the other party in court (if they want to press the matter) or to see them at dawn at 12 paces (depending on legal jurisdiction ).

As I said, IME when folks are put on the spot they do tend to fess up to stuff even though they may have preffered to mumble over things beforehand!

Whether these new terms are legally enforceable or not, nonetheless IMO they do still serve a useful purpose......if the Vendor can also spot $5k of fixes required, then he has the opportunity to simply mention them early doors. In practice I would probably already know at least a couple of things that a prudent / honest Vendor would mention (even if only "just in case" / to save future argument or surprise), and if he failed to disclose them I probably would not sign the contract let alone pay for a survey as a good indicator that Vendor is not straight.

But it's an "each to their own" thing in my book - no right or wrong, as in business as in life