Is a Pro Forma Agreement Binding ?

[vbrent]

Hi, is a "purchaser's proforma closing statement" considered a binding decision to purchase a boat at the set price? Wiki (Pro forma - Wikipedia, the free encyclopedia) kind of implies a proforma is binding agreement to the cost of the transaction, but they also state it is a formality.

I've already put down 10% based on a contract and now I await the survey before making any final decision on purchase. The contract does state that written acceptance of the purchase must be made by the buyer. I wonder if this proforma they want me to sign can be construed as that written decision to purchase.

[SailFastTri]

What is the location of governing law for this transaction? You really should consult an attorney if in doubt.

[vbrent]

Yeah, I know, my attorney seems unreachable right now, I'm looking for another. The jurisdiction is Florida, USA.

The yacht broker explains to me this is a formality so that I understand I have to pay taxes and fees above and beyond the boat's purchase price, but she wants me to sign it right now, and cannot wait for the survey in two days. Also, the contract does not stipulate there will be a proforma, but it does include the various fees acknowledged in the proforma and it does state there will be no other duties or obligations.

I'm really wondering if all you boat owners, who bought a yacht through a broker, went through this same process. Is it normal?

[SailFastTri]

Taxes are your responsibility -- not the broker's, unless the broker is not a "broker" but is a "dealer" (a dealer is a state-registered reseller who buys and resells title and is therefore the seller -- whereas a broker is an agent for the seller, who is usually a third-party who has title).

If she's worried about disclosure just tell her to give you a letter of understanding that the taxes are not included in the selling price, and you can counter-sign that.

Anything more just muddies the clarity of your contract -- you only want ONE agreement, and anything else must be an addendum to that one document, not a separate agreement.

You don't HAVE to sign anything you're not comfortable with and you should not sign anything that has unclear implications.

As for "fees" usually brokers fees are paid by the seller, and come out of the purchase price. If there are any other fees (yard fees, etc.) those should be stipulated in detail -- as those are usually born by the seller.

Only fees associated with your own survey and sea trial should be paid by you.

You should NOT agree to undisclosed fees and you should not allow yourself to be pressured. He who holds the buck$ is KING, and you should walk if they don't respect that.

BTW - I'm not an attorney (just a businessman) so take my advice as "practical advice" not legal advice.

[SailFastTri]

One more thing -- I've never seen a "purchaser's proforma closing statement" or even heard of it. I've seen things like that when signing a home mortgage (at the closing) but those are disclosures of bank and loan fees, etc. I think the broker has an agenda and it's not in your best interests to trust the seller's broker.

[vbrent]

Cool, thanks for your response. I'm thinking along the same lines you are. She can wait until after the survey is completed.

[Capt Phil]

What's her hurry if it is just a 'formality'? I would be nervous signing anything in a rush... take a copy and have it reviewed by a competent attorney who YOU select.