The days of boilerplate aircraft purchase agreements are long over. (If they were ever here in the first place.) New regulations – whether from the FAA, IRS or from financial institutions – are continually added or change on a regular basis. Your first line of defense against unexpected difficulties at closing is the aircraft purchase agreement. You want to make sure that your purchase agreement protects you in multiple ways and takes into account the requirements and expectations of the current market.
Aircraft Purchase Agreements | Four Questions to Ask
- Additional regulations and procedures are implemented monthly. Certain provisions of a prior purchase agreement can become obsolete overnight. Are you up to date?
- Does the purchase agreement protect your interests before, during – and most important – after the transaction?
- Financing institutions have increased the amount of disclosure required prior to closing. Does the purchase agreement address which party is responsible for the disclosures? If not, the transaction could face financial hurdles or collapse.
- Is the purchase agreement tailored for this specific transaction? Beware of boilerplate and outdated language. A small change in the details could require large revisions to the agreement.
To avoid problems during the negotiation of the purchase agreement or at the closing table, consult with a reputable attorney experienced in corporate aviation. This will help reduce unexpected difficulties and events at closing, ensure FAA and IRS compliance, and add value by creating a purchase agreement that addresses the current market trends and is tailored to the aircraft and the goals of the transaction.
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