One reason is that you don`t want to take the time to negotiate a purchase contract unless you have a contract. Most OLIs are never signed and never become contracts, as the parties are unable to agree on the purchase price and other important conditions. As a result, the LOI is a delicate phase in negotiations between buyer and seller; the parties try to agree on issues such as the price, the total date of the transaction and whether the buyer must commit to the purchase before concluding his due diligence. Litigation over tax allowances, the right to a jury trial and the payment of trust costs can wait. Except in the case of a wholesale business, the buyer has the right to perform a prebuy inspection. Sellers are rarely willing to give carte blanche to the buyer in this regard and it has become standard to add the agreed volume of work to the agreement as an exhibition. On the other hand, buyers should have a say in a major seller sale agreement: the seller`s wish not to have other obligations related to the aircraft after closing. The standard in business jet-deals is that planes are sold „where is“, a point that sellers` lawyers sometimes do very long to strike at home. [See „When Boilerplate Boils Over,“ 2017 BJT Buyers`Guide.
-Ed.] (g) The seller agrees to compensate the buyer for and against any claim by a broker or other party that asserts an interest in the aircraft or the purchase price resulting from a real or alleged or contractual relationship or agreement with the seller. Once the ACT has been signed and a deposit has been funded, it is time to design a sales contract. Who would do that? If you buy a new aircraft (and in some cases even a used aircraft) from a manufacturer, don`t think for a moment that there is a chance to design the contract; The manufacturer will present a draft contract in its standard form. However, in other cases, the party entitled to submit the first draft is being negotiated. CONSIDERING that the seller wishes to sell the aircraft to the buyer (as defined in point 1.1 a) and that the buyer wishes to buy it from the seller under the conditions provided; And there`s one thing the two parties should agree on: don`t start a broker agreement that often requires a full description of both parties.