Before entering into a contract to purchase an aircraft, it is essential
to have a proper letter of intent. As with any other transaction, buyers
and sellers have certain risks. The risks include: 1) price fluctuations,
2) the uncertainty in each step of the transaction, 3) potential disagreements
over who pays for what, 4) unexpected delays, 5) third parties, and 6)
A comprehensive letter of intent for a purchase of an aircraft should address
all of the above and more.
1) Conduct due diligence on the buyer or seller - who actually owns the
aircraft, are you dealing with a reputable company?
2) Lock in the purchase price - prices fluctuate and someone else may want
to buy it for more.
3) Detail the inspection schedule - what happens if there is a delay, or
what if there is something wrong with the aircraft?
4) Detail the entire transaction schedule, including the final purchase
agreement signing date - anticipate and avoid delays. For how long is
your offer open? Who delivers what, where, in what condition, and when?
5) Finalize all information on escrow accounts - avoid costly mistakes
of losing the initial deposit.
6) Outline legal remedies for potential breaches - what is a material breach?
When does it occur?
7) Address potential contingencies - what happens if there is a delay?
Is time of the essence?
8) There are other contingencies - consult with your attorney to address
your specific facts.
Letters of intent are important to clarify the expectations of the buyer
and the seller and to prevent litigation. Communication and understanding
between the buyer and the seller is critical.
This information is not legal advice. It is intended for general public
only. Contact an attorney from The Federal Practice Group for a free consultation
to address your specific legal needs.