Non-equity partnership contracts

[swami maximus]

Hey, not sure where to post this, but I am starting a non-equity partnership with someone and was looking for a legal contract floating around out there... Something to the effect that if he crashes the boat without me, that he is liable for its damage (to other boats included) and repair. Anyone out there have exp with partnerships and words of advice and maybe a contract that I could use?

Smax

[Ex-Calif]

I don't have one but I am not sure one can get boat insurance on a boat one does not own. Will he self insure or will his homeowner or other umbrella policy cover non-owned boats?

[boris]

the insurance aspect is ezy. He pays you $1 for a share (if the boat is worth $10,000 he owns 1/10 000 of the boat) and so he is a legal owner and able to obtan insurance

[svHyLyte]

A "Non-Equity Partnership" is somewhat a non sequitar. For all intents and purposes you are describing a private charter arrangement for which there are many contract formats. In re: insurance, consider contacting Al or Gary Golden at International Marine Insurance Services ("IMIS") to discuss approporiate coverages. Liability coverage--for you in this case--would be wise as "hold harmless" provisions in such agreements are easily defeated.

FWIW

[imagine2frolic]

Sounds like you are opening a can of worms!

[Pblais]

I would agree with HyLlyte.

The nut of it all will be an insurance policy that covers both of you. As the equity owner many places will go after you in the event anything goes bad of any nature. They won't even care about the partner. That means after they get done with you then you have to go after your partner. That won't go well or easy. You pay twice.

The process of assigning liability to the non equity partner is the legal hassle you'll need a lot of expert legal advice on. Internet legal advice won't make it for this agreement. The partner really faces the easy part of this deal since they have almost no downside. You however gain double the liability in exchange for a fixed amount of money.

When the equity is equal you can usually count on the two partners having a similar interest in the boat and while disagreements come up you both are on even ground and will both act in your mutual interest because you really are forced to. This deal does not even being to start like that. Relationships don't usually get better when they don't start out even.

[hellosailor]

Without the details, I'd also agree it sounds like you are in for potential problems. Liability, insurance, commercial use...

Better to see an inexpensive storefront lawyer who can enlighten you both on the issues and options and call it a cheap $100 educational session. And he might even have some stock forms you can use for the job, once you get a clearer picture of what may be involved.