Liability issues

[herman pahls]

Hello Forum
I searched this forum regarding Experimental Liability and found a thread back in 2010 that briefly dealt with liability issues.
If all goes as planned, next week I will be owning a Model 4-1200 with a 912S which I have been searching for a long time.
This Kitfox is not being sold by the builder.
I would like to sell my Model 2-950 with a 582 but is it worth the 15-$20,000 return if selling it places me at financial risk since I built the airplane and have the Repairman Certificate.
I tried for years to get a friend to sell me his RV-6 and he was advised by a Law School Professor here in Oregon that since he had the repairman certificate it could be financial suicide to sell the plane.
Is that true?
If so, many builders must be at risk when they sell there Kitfox's or any experimental.
I am quite sure my Kitfox does not have a permanent stamping that identifies that fuselage.
If it did it could easily be removed.
What keeps me from removing the pop riveted on placard and N-numbers that link me to that aircraft and then the new owner would have to re register and fly off a new 40 hours?
I said the same to the RV-6 owner and he said he could easily be linked to that aircraft by the serial numbers on the engine and prop.
I bought the IVO prop new but not the 582.
Seems like there was a discussion recently where some one wanted to buy a Kitfox or Avid that did not have N-numbers or FAA registration.
Makes me wonder if it did at one time and the owner removed anything linking him to ownership for liability reasons.
At one time I considered donating it to a College Flying program that wanted to use it for basic aircraft systems instruction and it would never fly again.
I will appreciate your advice.
Thanks
Herman

[N981MS]

If the aircraft is "de-registered" it cannot be "re-registered". Here are a couple of links with good discussion. Mel from post 3 in the first link seems like a reasonable and well versed guy through my perusings at VAF over several years.

http://www.vansairforce.com/communit...+airworthiness

http://www.vansairforce.com/communit...+airworthiness

This is one reason why I will likely always own my Kitfox. The other is that it is a blast to fly.

[dholly]

Herman -

I started the LLC aircraft ownership thread for liability issues during ownership and operation of E-AB aircraft. The liability upon sale obviously is a different issue, but no less important.

Personally, I feel it is mandatory to require an exculpatory hold harmless agreement signed by the buyer. I've done this for planes, kits and parts. I believe the key is to make it such an uphill battle that even a 'shotgun lawsuit' type contingency attorney hoping to achieve some kind of a settlement to go away will pass on taking the case.

The agreement I use was drafted by my attorney with a LOT of my input. It clearly and repeatedly states the risks agreed to by the buyer and his/her heirs and assigns, requires buyer initials at each and every paragraph plus spousal agreement and signature (if applicable) as well. It is four pages of clear and unambiguous no recourse wording that leaves no doubt about the signatories intent.

Or, at least I hope it does....

Of course, should you get anything less than a warm, fuzzy feeling from a particular buyer when broaching the liability issue, you can always pass on that transaction.

[N213RV]

But what happens when your buyer re-sells it years later? Thoughts?

Herman -

I started the LLC aircraft ownership thread for liability issues during ownership and operation of E-AB aircraft. The liability upon sale obviously is a different issue, but no less important.

Personally, I feel it is mandatory to require an exculpatory hold harmless agreement signed by the buyer. I've done this for planes, kits and parts. I believe the key is to make it such an uphill battle that even a 'shotgun lawsuit' type contingency attorney hoping to achieve some kind of a settlement to go away will pass on taking the case.

The agreement I use was drafted by my attorney with a LOT of my input. It clearly and repeatedly states the risks agreed to by the buyer and his/her heirs and assigns, requires buyer initials at each and every paragraph plus spousal agreement and signature (if applicable) as well. It is four pages of clear and unambiguous no recourse wording that leaves no doubt about the signatories intent.

Or, at least I hope it does....

Of course, should you get anything less than a warm, fuzzy feeling from a particular buyer when broaching the liability issue, you can always pass on that transaction.

[dholly]

Covered in the 'Binding on Heirs and Assigns Clause' section wording. A condition of the Agreement stipulates the buyers' successors and assigns are subject to the obligations of the agreement without exception, binds all parties in perpetuity and can not be changed or delegated.

Another condition requires that for a legal transfer and assignment of ownership to be effective, the buyer must sign a separate assumption section agreeing to assume all rights and obligations under the agreement... which, in part, includes any and all liability arising from or relating to the build, maintenance, modification and operation of the aircraft. Of course, all the standard "you agree to assume 100% the risk, personal and otherwise" clauses are there and, again, every single paragraph and clause requires acceptance by buyer initials.

The way the agreement is written and structured, there would be a -very- hard time attempting to assert that the buyer did not understand -exactly- what he was signing. Even if such an attempt were made, the Agreement also includes a clause that recommends a buyer seek legal counsel before signing any legal agreement, and requires the buyer to check whether he/she availed themselves or waived the right to seek legal opinion before signing.

Please be aware, I am NOT providing legal advise. This is simply what I am comfortable with. Along with the rest of the Agreement, it seemed like a pretty strong attempt to keep all liability with the current owner and dissuade any future ambulance chasers. I've had some question but never refuse to sign.

[bumsteer]

You can find some useful info on the EAA website. Aviation Interests-Homebuilders-Articles-Selling/Buying. Several articles on the subject.

Rick

[dholly]

The EAA and AOPA info is very helpful. But keep in mind their comments and examples may be somewhat generic as it is published for the benefit of all membership regardless of domicile. Key to any good contract or agreement and enforcement is state law requirements. If you feel you need liability protection, it is in your best interest to have a local attorney -preferably one specializing in business contract and liability law- draft the agreement.

...working from home today but not getting much done...

[herman pahls]

I read the VansAirforce liability discussion that Maxwell Duke (post #2) posted the links to.
Interesting info. but not conclusive as to the builders liability since this subject has apparently not been tested in court yet.
I plan to follow dholly's example to seek legal advice.
Today I called Gary Brown, a well known DAR here in Oregon who specializes in buying and selling Vans RV's to get his take on the subject.
The simplest solution is an addendum that he would forward to me that in his opinion was bullet proof protection.
The other solution is to sell the airplane as non airworthy, but not parted out.
He claims if I understood him correctly, that the new owner could get the airplane airworthy through a DAR without performing 51% of the build, would have to fly a new 40 hours and hire out the condition inspections.
This info. seems contrary to recent discussions.
I will post the addendum when I get it.
Herman