SlideShare ist ein Scribd-Unternehmen logo
1 von 43
Downloaden Sie, um offline zu lesen
Legal Issues - Purchase of
      new / used Aircraft
                  Paul Briggs
             6 November 2012
            ADMIN: 1544 6107
Paul Briggs presentation - lLw Society of Ireland.ppt
Agenda
             New Aircraft - liability
         •   Excusable / Non-excusable delay - Liquidated Damages
         •   Exclusion of Liability
         •   Unfair Contract Terms Act
         •   OEM warranty – interface commitment
             Used Aircraft
         • LOI - Good faith?
         • Lex situs – transfer of title / creation on mortgage on purchase
         • as is – where is"
            - Delivery Condition
            - Indemnities / Disclaimer
            - OEM / MRO Warranties
         • Title Warranty
            - Liens
            - Searches
         • Closing / cash and practical issues


© Bird & Bird LLP 2011
Who is Paul Briggs?
             Aircraft business since 1987
             • Beaumont & Son
             • Air 2000: both leasing companies
             McCann FitzGerald / GPA 1989 to 1991
              • Summers in Shannon!
             Hong Kong / China 1992 / 1995
             BAE 1995 / 2004
             • Hatfield – BAE Asset Management
             • Oasis Leasing
             • Airbus Asset Management
             • FSTA
             Twobirds since 2004
             • Joint head of Aviation & Defence


© Bird & Bird LLP 2011
MY AIM
              Real Law! Yes indeed
         • Real cases
         • Real statutes
              Law is FUN
         • messin' about with aeroplanes
         • Train set
              Business practice and $*$T happens
              War stories from real deals



© Bird & Bird LLP 2011
Purchase of a new Aircraft Security:
 Aircraft from Manufacturer Principles
                  General




© Bird & Bird LLP 2011
Delay / Breach –
Liquidated Damages
Excusable Delay
         Manufacturer not responsible for delays beyond its "control
      and not occasioned/caused by its fault or negligence"
         Acts of God, war, natural disasters, slowdown or
      interruption o f work, labour disputes, failure of sub-
      contractor or supplier to furnish materials etc –
      Excusable Delays
         Termination on Excusable Delay
         Total Loss
         • Buyer request a replacement Aircraft; or
         • Agreement terminates without liability of Buyer




© Bird & Bird LLP 2011
Non-excusable Delay / LDs

            Liquidated damages – Seller delay
            Genuine Pre-estimate of loss?
            Penalty clauses are unenforceable!
            Grace period
            Liquidated damages usually capped
            Buyer's right to terminate
            Commercial value of offered LDs?
            Buyer better off relying on law?
            Anticipatory Breach
            Specific Performance


© Bird & Bird LLP 2011
Washington State / Boeing

        VAA / Cargolux
        Late delivery: breach – damages / cancellation
        Easier to claim – no need to prove amount of loss
        Boeing aggressively defends LD claims and seeks to
      negotiate down
        Really cap of Purchaser's rights
        Sole remedy?
        Careful not to remove cancellation right
        peterson.jeff@dorsey.com




© Bird & Bird LLP 2011
Buyer Default / PDPs
             PDPs instalment of Purchase Price not "deposit"
             Seller right to keep on breach
             Appreciating market?
             Correct method of calculating contractual loss of Seller?
         • Duty to mitigate
         • Sale to another customer / order book
         Hadley v Baxendale (1854) party can only claim for losses arising
      from the other parties breach of contract is the losses are not too
      remote. There are two limbs to the test:
         • Losses which a reasonable man would have realised was a 'not unlikely'
             consequence of the breach (direct losses generally fall under this limb);
         •    Losses which may have reasonably been in contemplation of the parties
             at the time they made the contract, as a probable result of the breach
             (consequential or special damages generally fall under this limb).
             Recent example – enforceability of settlement

© Bird & Bird LLP 2011
Exclusion of Liability
Risk Allocation
             Airline Protection:
         •   Warsaw Convention 1929
         •   Montreal Convention 1999
         •   1st tier: 100,000 SDRs (EUR 135,000)
         •   Excess: presumed fault of carrier – carrier would need to prove
             damage not due to its negligence / caused by negligence of
             another
         Manufacturer limits liability to express warranties and
      excludes all other liability
         Erosion of Airline limits
         Erosion of Manufacturer limits




© Bird & Bird LLP 2011
Contribution to 3rd Party Damage
         Excluded from exclusion to the extent of OEM's relative % of
      the total fault or other legal responsibility of all persons causing
      such bodily injuries or damage
         No standard practice – depends on negotiating position of
      parties
         Boeing have offered above carve out
         Engine manufacturer: concept of joint tortfeasors




© Bird & Bird LLP 2011
Warranties
        Manufacturer: Warranted Part – manufactured to design of
      OEM or having OEM part number will be free from defects in:
         • Material
         • Workmanship
         • Design
            Expiry of performance guarantees
            IP Warranty
         • Patent
         • Copyright
         • Software
        Engines and BFE usually separate from OEM [ATR issues
      engine warranties]
        Vendor warranties / Interface commitment


© Bird & Bird LLP 2011
Exclusion of Liability
         Manufacturer liability:
                  Contract – Sale of Goods Act 1979
                  Tort
                  Strict liability
         Unfair Contract Terms Act 1977
         Does UCTA apply
         • Consumer
         • Standard Terms
            - Proper and meaningful negotiation?
            - All negotiated except exclusion clause?
            - International Supply Contract S.26
                   ~ BAe V Amiri Flight
                   ~ Trident Turboprop (Dublin) V First Flight [2009]
                   ~ Air Transworld V Bombardier [2012] High Court
         If so to which provisions
         Reasonableness test




© Bird & Bird LLP 2011
Purchase of second
                         hand aircraft from
                         leasing
                         companies/airlines
© Bird & Bird LLP 2011
Lex Situs – sales tax / VAT!
        Structure – usually buyer risk [unless sale and lease back]
        Number of jurisdictions have "friendly" sales tax regulations
      and "fly away" exemptions
        Look through lessor?
        Greek ATR experience
        UK Q400 experience
        VAT – European Court of Justice: Re A Oy C-33/11
        International airspace




© Bird & Bird LLP 2011
Lex Situs – transfer of interest
         Basic rule: transfer of ownership interest (sale or mortgage)
      aircraft should be in UK or jurisdiction where transfer will be
      recognised
         Evidence
         Mortgage taking effect at time of purchase
         • International airspace?
         • Hamburg
         • Toulouse
             Proper law not just governing law
             Blue Sky
         •   3 X 747
         •   1 aircraft location unknown – English law applied
         •   1 aircraft in Netherlands
         •   International airspace?
© Bird & Bird LLP 2011
Documentation
  dealing with purchase
  (LOI/Purchase
  Agreement)




© Bird & Bird LLP 2011
Letter of Intent
Good Faith – VistaJet V Shaker
        LOI contained a provision that where “despite the exercise of
     good faith and reasonable endeavours” the parties “fail to
     reach agreement ... before the Cut-Off Date ... [Vistajet/the
     Seller] shall ... refund the deposit to [Mr Shaker/the Buyer/the
     Purchaser]”
        No agreement was reached, despite several extensions to the
     cut off date
        The final amendment/extension to the LOI included the
     following acknowledgement: “notwithstanding the exercise of
     good faith and reasonable endeavours by all relevant parties"
          Mr Shaker sued for the refund of the deposit



© Bird & Bird LLP 2011
Good Faith
         Vistajet refused to repay on the basis that Mr Shaker had not
      carried out negotiations in good faith, nor had he used
      reasonable endeavours to complete the deal.
            Mr Shaker submitted that:-
         • such obligations were unenforceable (i.e. agreement to agree);
            and
         • VJ estopped




© Bird & Bird LLP 2011
Good Faith

        Judgment:
       • Agreements to use reasonable endeavours to agree or to negotiate in good
          faith, such as the LOI between Shaker & Vistajet, are unenforceable if
          “...there are no objective criteria by which the court can decide whether
          a party has acted unreasonably..”
       • Duty to negotiate in good faith is unworkable because”... it is inherently
          inconsistent with the position of a negotiating party...”
       • Accepted Mr Shaker’s contractual estoppel argument
       • Terms governing the cut-off date and the return of the deposit were
          legally binding and that Vistajet was obliged to return the money to
          Shaker
       • No leave to appeal – because of estoppel (not good faith argument)
          [October 2012]



© Bird & Bird LLP 2011
LOI - enforceability
            Majority of the LOI terms to be non-binding
         • Inspection
         • Board approval
         Buyer paying deposit will want comfort that the deposit can
      be returned in certain scenarios:
         • Failure to deliver Aircraft by [x];
         • Non-compliance with the Delivery Condition;
         • Event of Loss
            Confidentiality and governing law provisions binding
            Who holds cash – Jerry Starkes!




© Bird & Bird LLP 2011
Purchase Agreement
Purchase from lessor with lease attached


           No physical Delivery
           Security Interests
           CPs
           Novation
         • New obligation between A and C
         • Security
           Cash
           Maintenance Reserves – reconcilliation
           Commercial "arm wrestle"



© Bird & Bird LLP 2011
"as is- where is"

           Different meanings – causes widespread confusion
         • Aircraft to meet delivery condition – then legally accepted without
           warranty; or
         • It is what it is – buy it is you want it!
         Airworthy and serviceable?
         Definition of "Airworthiness from ACG – v – Olympic
         The court could not identify any previous authority for the
      meaning of the term “airworthiness” and looked to the world of
      shipping: "would a prudent operator of an aircraft have
      required that the defect should be made good before
      permitting the aircraft to fly, had he known of it. If he would,
      the aircraft was not airworthy."
         Caveat – definition was provided obiter – courts need not be
      bound by the definition
© Bird & Bird LLP 2011
Operational Indemnities
        Wide Buyer indemnity in favour of Seller covering losses,
     costs, expenses, claims etc arising out of:
        • the sale, purchase, manufacture, ownership, possession,
          inspection, use, control etc of the Aircraft following Delivery;
        • Design, article or material in the Aircraft or the operation or use
          of the Aircraft constituting an infringement of patent, copyright,
          trademark, design
        • Occurrence not claims based
          Exceptions:
        • Wilful misconduct or recklessness of Seller [gross negligence];
        • Ordinary or usual operating or overhead expenses;
        • Act, omission, event or circumstance before Delivery



© Bird & Bird LLP 2011
Indemnity

        Buyer can request a "flip" indemnity covering losses,
     liabilities etc occurring before Delivery
       • More limited – subject to Disclaimer
       • Novating lease – Seller limited warranties about lease and lessee
          Tax
       • Buyer usually takes tax risks
       • Different in sale and lease-back
       • Stamp, transfer, sales, withholding, value added etc arising in
         connection with the sale of the Aircraft.
       • Exceptions:
          - Assessed on the overall income, profits or gains of Seller;
          - Wilful misconduct or reckless of Seller;


© Bird & Bird LLP 2011
Tail Insurance

         Run off liability insurance
         2 years or next major check / structural modification
         Coverage for aircraft third party, passenger, baggage, cargo
      etc.
         Name Seller as additional insured
         Separate policy
         Notice of cancellation (NOC)




© Bird & Bird LLP 2011
Assignment of Warranties


            Residual OEM warranties / SLP
            Assignment / Agreement
            MRO warranties
         • Paint
         • Airframe Maintenance
         • Engine and APU overhaul




© Bird & Bird LLP 2011
Cape Town / Liens

        Contract of sale can be registered as a "Prospective International
      Interest"
        Seller usually objects
         • How to remove if sale does not complete
             priority search immediately before Delivery
             Liens Generally
         •   Eurocontrol
         •   UK Fleet Lien
         •   N Reg search
         •   MRO - possessory
         •   Airports – Jordan airport!
         •   Fuel
         •   Title insurance


© Bird & Bird LLP 2011
Closing

             Bill of sale
         •    possession of original
         •    Escrow
         •    Security Release
         •    Solicitors Undertaking
             Back to Birth
             NY Banking Hours
             Technical Acceptance / Delivery / Legal Acceptance
             Execution process
             Deeds – consideration / settlement
             Opinions
             Free circulation


© Bird & Bird LLP 2011
Interesting Topics not covered


        OEM: fuel burn, city pairs, maintenance costs, training,
      support
        PBH / total care
        Export Control
         • Blue Sky (again!)
            Price, Options, Slide Rights, Escalation
            Documents
            Certification
         • NAA
         • EASA / FAA
         • CAMO
            Registration
© Bird & Bird LLP 2011
About Bird & Bird
                         Key facts:
                         Awarded Global Law Firm of the
                         Year 2009 by the International
                         Council of Jurists
                         23 offices across Europe, the
                         Middle East and Asia*
                         Over 1000 lawyers and legal
                         practitioners including 229
                         partners




© Bird & Bird LLP 2011
Aviation & ADS at Bird & Bird

 ● Bird & Bird is an international   "You can really rely on
                                     their deep, specialised
                                                               "This team makes a
                                                               notable impression
   commercial firm focusing on       aviation knowledge."
                                     Chambers & Partners
                                                               on the market,
                                                               particularly in the

   chosen technology sectors: IP,    2010                      aviation sector and
                                                               is praised for
                                                               providing clients
   communications, IT, aviation,                               with speedy accurate
                                                               and no-nonsense

   aerospace, defence and security                             advice."
                                                               Chambers & Partners

   (ADS)                                                       2009



 ● Over the last year over 490 fee    "The Bird & Bird
                                      team has 'a more
                                                               "The aircraft
                                                               financing group at

   earners have worked on Aviation    concise approach
                                      and working
                                                               this firm offers a
                                                               strong sector focus
                                      mentality than           and lawyers with
   & ADS projects in 16 of our 21     larger firms – it is
                                      business-based,
                                                               experience working
                                                               inside the industry."

   offices                            dynamic and to the
                                      point."
                                                               Chambers & Partners
                                                               2010
                                      Chambers & Partners
 ● Core strategic sector for          2010


   Bird & Bird


© Bird & Bird LLP 2011
Airlines




© Bird & Bird LLP 2011
Aircraft investors




© Bird & Bird LLP 2011
Emerging markets – Middle East




© Bird & Bird LLP 2011
Emerging markets – Far East




© Bird & Bird LLP 2011
Sharing your passion working your
               way for the longhaul across the
              whole industry crossing the globe
                 touching the metal to help you
            ‘fly’ that’s Aviation with Bird Bird



© Bird & Bird LLP 2011
Thank you
                                                   Paul Briggs
                                                           Partner
     Direct tel: +44 (0)20 7905 6353
                paul.briggs@twobirds.com

   Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses. www.twobirds.com

Weitere ähnliche Inhalte

Was ist angesagt?

Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...
Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...
Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...Project Controls Expo
 
Chapter 19: Rights of Third Parties
Chapter 19: Rights of Third Parties Chapter 19: Rights of Third Parties
Chapter 19: Rights of Third Parties Tara Kissel, M.Ed
 
Performance Bond Workshop Exercise
Performance Bond Workshop ExercisePerformance Bond Workshop Exercise
Performance Bond Workshop ExerciseFrancis Ho
 
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...SHIMOKAJI IP
 
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...Financial Poise
 
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...Francis Ho
 
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)Financial Poise
 
Intellectual Property and Cyberlaw
Intellectual Property and CyberlawIntellectual Property and Cyberlaw
Intellectual Property and CyberlawTara Kissel, M.Ed
 
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read Only
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read OnlyBpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read Only
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read OnlyJonClose
 
Chapter 13: Nature of Contracts and Contract Remedies
Chapter 13: Nature of Contracts and Contract Remedies Chapter 13: Nature of Contracts and Contract Remedies
Chapter 13: Nature of Contracts and Contract Remedies Tara Kissel, M.Ed
 
Alternatives for Resolving Controversies
Alternatives for Resolving ControversiesAlternatives for Resolving Controversies
Alternatives for Resolving ControversiesTara Kissel, M.Ed
 
Chapter 16: Genuine Assent and Contractual Capacity
Chapter 16: Genuine Assent and Contractual Capacity Chapter 16: Genuine Assent and Contractual Capacity
Chapter 16: Genuine Assent and Contractual Capacity Tara Kissel, M.Ed
 
Article v issue 3 nec-fidic adjudication
Article v issue 3   nec-fidic adjudicationArticle v issue 3   nec-fidic adjudication
Article v issue 3 nec-fidic adjudicationIffat Al Gharbi
 
Damages Calculations in Intellectual Property Cases in Canada
Damages Calculations in Intellectual Property Cases in CanadaDamages Calculations in Intellectual Property Cases in Canada
Damages Calculations in Intellectual Property Cases in CanadaDuff & Phelps
 
Ind AS 116 Leases
Ind AS 116 LeasesInd AS 116 Leases
Ind AS 116 LeasesParas Jain
 
It's Only Money? How Your Clients Can Keep More of It When Customers File Ba...
It's Only Money?  How Your Clients Can Keep More of It When Customers File Ba...It's Only Money?  How Your Clients Can Keep More of It When Customers File Ba...
It's Only Money? How Your Clients Can Keep More of It When Customers File Ba...terigrasmussen
 
Chapter 28: Secured Transactions
Chapter 28: Secured TransactionsChapter 28: Secured Transactions
Chapter 28: Secured TransactionsTara Kissel, M.Ed
 

Was ist angesagt? (20)

Suretyship
SuretyshipSuretyship
Suretyship
 
Liquidated damages
Liquidated damagesLiquidated damages
Liquidated damages
 
Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...
Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...
Project Controls Expo, 18th Nov 2014 - "CONSTRUCTION ACCELERATION— A GLOBAL T...
 
Chapter 19: Rights of Third Parties
Chapter 19: Rights of Third Parties Chapter 19: Rights of Third Parties
Chapter 19: Rights of Third Parties
 
Performance Bond Workshop Exercise
Performance Bond Workshop ExercisePerformance Bond Workshop Exercise
Performance Bond Workshop Exercise
 
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...
Generating Revenue and Reducing Costs of Patent Litigation for Taiwan Compani...
 
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...
Bankruptcy Claims Trading (Series: Bankruptcy Transactions 301: Advice for th...
 
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...
Update on Construction Insurance, Bonds and Guarantees - Francis Ho - Olswang...
 
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)
The Intersection of IP & Bankruptcy (Series: Chapter 11 Potpourri)
 
Intellectual Property and Cyberlaw
Intellectual Property and CyberlawIntellectual Property and Cyberlaw
Intellectual Property and Cyberlaw
 
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read Only
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read OnlyBpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read Only
Bpe Presentation On Changes To The Construction Act 2010 V7 1 Final Read Only
 
Chapter 13: Nature of Contracts and Contract Remedies
Chapter 13: Nature of Contracts and Contract Remedies Chapter 13: Nature of Contracts and Contract Remedies
Chapter 13: Nature of Contracts and Contract Remedies
 
Alternatives for Resolving Controversies
Alternatives for Resolving ControversiesAlternatives for Resolving Controversies
Alternatives for Resolving Controversies
 
Chapter 16: Genuine Assent and Contractual Capacity
Chapter 16: Genuine Assent and Contractual Capacity Chapter 16: Genuine Assent and Contractual Capacity
Chapter 16: Genuine Assent and Contractual Capacity
 
Contract law: the basics and practical tips
Contract law: the basics and practical tipsContract law: the basics and practical tips
Contract law: the basics and practical tips
 
Article v issue 3 nec-fidic adjudication
Article v issue 3   nec-fidic adjudicationArticle v issue 3   nec-fidic adjudication
Article v issue 3 nec-fidic adjudication
 
Damages Calculations in Intellectual Property Cases in Canada
Damages Calculations in Intellectual Property Cases in CanadaDamages Calculations in Intellectual Property Cases in Canada
Damages Calculations in Intellectual Property Cases in Canada
 
Ind AS 116 Leases
Ind AS 116 LeasesInd AS 116 Leases
Ind AS 116 Leases
 
It's Only Money? How Your Clients Can Keep More of It When Customers File Ba...
It's Only Money?  How Your Clients Can Keep More of It When Customers File Ba...It's Only Money?  How Your Clients Can Keep More of It When Customers File Ba...
It's Only Money? How Your Clients Can Keep More of It When Customers File Ba...
 
Chapter 28: Secured Transactions
Chapter 28: Secured TransactionsChapter 28: Secured Transactions
Chapter 28: Secured Transactions
 

Andere mochten auch

Oct09 Survey Companies Using Bizav
Oct09 Survey Companies Using BizavOct09 Survey Companies Using Bizav
Oct09 Survey Companies Using Bizavhcier1
 
Internet of things report 2014 by copperberg research
Internet of things report 2014 by copperberg researchInternet of things report 2014 by copperberg research
Internet of things report 2014 by copperberg researchThomas Igou
 
Portafolio Artiachi Rodriguez
Portafolio Artiachi RodriguezPortafolio Artiachi Rodriguez
Portafolio Artiachi Rodriguezartiachirodriguez
 
Hitta och attrahera rätt kompetens
Hitta och attrahera rätt kompetensHitta och attrahera rätt kompetens
Hitta och attrahera rätt kompetensOscar Höglund
 
Konsten att bli synlig
Konsten att bli synligKonsten att bli synlig
Konsten att bli synligOscar Höglund
 
Sociala medier för egenstartare
Sociala medier för egenstartareSociala medier för egenstartare
Sociala medier för egenstartareOscar Höglund
 
Aftermarket Post Event Report
Aftermarket Post Event ReportAftermarket Post Event Report
Aftermarket Post Event ReportThomas Igou
 
עבודה בשפה ראש השנה-איתמר נדיב ה1
עבודה בשפה  ראש השנה-איתמר נדיב ה1עבודה בשפה  ראש השנה-איתמר נדיב ה1
עבודה בשפה ראש השנה-איתמר נדיב ה1gali1030
 
How Google Protects your Data
How Google Protects your DataHow Google Protects your Data
How Google Protects your DataThomas Igou
 
AMETROPIAS y patología conjuntival.
AMETROPIAS y patología conjuntival.AMETROPIAS y patología conjuntival.
AMETROPIAS y patología conjuntival.Max Covarrubias
 

Andere mochten auch (11)

Oct09 Survey Companies Using Bizav
Oct09 Survey Companies Using BizavOct09 Survey Companies Using Bizav
Oct09 Survey Companies Using Bizav
 
Internet of things report 2014 by copperberg research
Internet of things report 2014 by copperberg researchInternet of things report 2014 by copperberg research
Internet of things report 2014 by copperberg research
 
Portafolio Artiachi Rodriguez
Portafolio Artiachi RodriguezPortafolio Artiachi Rodriguez
Portafolio Artiachi Rodriguez
 
Hitta och attrahera rätt kompetens
Hitta och attrahera rätt kompetensHitta och attrahera rätt kompetens
Hitta och attrahera rätt kompetens
 
Sitios la quinta
Sitios la quintaSitios la quinta
Sitios la quinta
 
Konsten att bli synlig
Konsten att bli synligKonsten att bli synlig
Konsten att bli synlig
 
Sociala medier för egenstartare
Sociala medier för egenstartareSociala medier för egenstartare
Sociala medier för egenstartare
 
Aftermarket Post Event Report
Aftermarket Post Event ReportAftermarket Post Event Report
Aftermarket Post Event Report
 
עבודה בשפה ראש השנה-איתמר נדיב ה1
עבודה בשפה  ראש השנה-איתמר נדיב ה1עבודה בשפה  ראש השנה-איתמר נדיב ה1
עבודה בשפה ראש השנה-איתמר נדיב ה1
 
How Google Protects your Data
How Google Protects your DataHow Google Protects your Data
How Google Protects your Data
 
AMETROPIAS y patología conjuntival.
AMETROPIAS y patología conjuntival.AMETROPIAS y patología conjuntival.
AMETROPIAS y patología conjuntival.
 

Ähnlich wie Paul Briggs presentation - lLw Society of Ireland.ppt

PRC Contract Law Principles and Risk Management in Contract Drafting
PRC Contract Law Principles and Risk Management in Contract DraftingPRC Contract Law Principles and Risk Management in Contract Drafting
PRC Contract Law Principles and Risk Management in Contract DraftingRHKLegal
 
RFP and Negotiation Best Practices.pdf
RFP and Negotiation Best Practices.pdfRFP and Negotiation Best Practices.pdf
RFP and Negotiation Best Practices.pdfTaralee Zimmerman
 
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex PintoLegal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex Pintocmmindia2017
 
The Masquerade Of Low Bids_Phillips
The Masquerade Of Low Bids_PhillipsThe Masquerade Of Low Bids_Phillips
The Masquerade Of Low Bids_PhillipsContract Cities
 
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas Financial Poise
 
Aviation insurance
Aviation insuranceAviation insurance
Aviation insuranceAkramMad1
 
Lec 7 - Istisna (1).pptx
Lec 7 - Istisna (1).pptxLec 7 - Istisna (1).pptx
Lec 7 - Istisna (1).pptxcbuba1999
 
Damage to-property-before-closing
Damage to-property-before-closingDamage to-property-before-closing
Damage to-property-before-closingevaflores090
 
CCCA Spring Conference 2011: Negotiating Major Business Agreements
CCCA Spring Conference 2011: Negotiating Major Business AgreementsCCCA Spring Conference 2011: Negotiating Major Business Agreements
CCCA Spring Conference 2011: Negotiating Major Business AgreementsNow Dentons
 
Damon compania v hapag lloyd international
Damon compania v hapag lloyd internationalDamon compania v hapag lloyd international
Damon compania v hapag lloyd internationalAzrie Johari
 
Liquidated damages contracts
Liquidated damages   contractsLiquidated damages   contracts
Liquidated damages contractsBhushan Goyal
 
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex PintoLegal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex Pintocmmindia2017
 
Legal Aspects of Charter Parties
Legal Aspects of Charter PartiesLegal Aspects of Charter Parties
Legal Aspects of Charter Partiescmmindia2017
 

Ähnlich wie Paul Briggs presentation - lLw Society of Ireland.ppt (20)

PRC Contract Law Principles and Risk Management in Contract Drafting
PRC Contract Law Principles and Risk Management in Contract DraftingPRC Contract Law Principles and Risk Management in Contract Drafting
PRC Contract Law Principles and Risk Management in Contract Drafting
 
Contract management sys
Contract management sysContract management sys
Contract management sys
 
RFP and Negotiation Best Practices.pdf
RFP and Negotiation Best Practices.pdfRFP and Negotiation Best Practices.pdf
RFP and Negotiation Best Practices.pdf
 
Cannon_Jeromy.pdf
Cannon_Jeromy.pdfCannon_Jeromy.pdf
Cannon_Jeromy.pdf
 
Business law
Business lawBusiness law
Business law
 
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex PintoLegal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
 
Contracts and psc
Contracts and pscContracts and psc
Contracts and psc
 
The Masquerade Of Low Bids_Phillips
The Masquerade Of Low Bids_PhillipsThe Masquerade Of Low Bids_Phillips
The Masquerade Of Low Bids_Phillips
 
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas
 
Aviation insurance
Aviation insuranceAviation insurance
Aviation insurance
 
Dealing with 'fit for purpose' obligation
Dealing with 'fit for purpose' obligationDealing with 'fit for purpose' obligation
Dealing with 'fit for purpose' obligation
 
Lec 7 - Istisna (1).pptx
Lec 7 - Istisna (1).pptxLec 7 - Istisna (1).pptx
Lec 7 - Istisna (1).pptx
 
Damage to-property-before-closing
Damage to-property-before-closingDamage to-property-before-closing
Damage to-property-before-closing
 
Preparing the contract, Doug Locke
Preparing the contract, Doug LockePreparing the contract, Doug Locke
Preparing the contract, Doug Locke
 
CCCA Spring Conference 2011: Negotiating Major Business Agreements
CCCA Spring Conference 2011: Negotiating Major Business AgreementsCCCA Spring Conference 2011: Negotiating Major Business Agreements
CCCA Spring Conference 2011: Negotiating Major Business Agreements
 
Damon compania v hapag lloyd international
Damon compania v hapag lloyd internationalDamon compania v hapag lloyd international
Damon compania v hapag lloyd international
 
Liquidated damages contracts
Liquidated damages   contractsLiquidated damages   contracts
Liquidated damages contracts
 
FIDIC intro author eng. mohammed fadlalla
FIDIC intro  author eng. mohammed fadlallaFIDIC intro  author eng. mohammed fadlalla
FIDIC intro author eng. mohammed fadlalla
 
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex PintoLegal Aspects of Charter Parties – Basic Issues by Alex Pinto
Legal Aspects of Charter Parties – Basic Issues by Alex Pinto
 
Legal Aspects of Charter Parties
Legal Aspects of Charter PartiesLegal Aspects of Charter Parties
Legal Aspects of Charter Parties
 

Kürzlich hochgeladen

Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfMichael Silva
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources PresentationAdnet Communications
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023SkillCircle
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneurabcisahunter
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoCoinGecko
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.Arifa Saeed
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI360factors
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESKumarJayaraman3
 
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...Matthews Bantsijang
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdfAdnet Communications
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent PreferencesGRAPE
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxPrecize Formely Leadoff
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...Antonis Zairis
 
Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707harshan90
 

Kürzlich hochgeladen (20)

Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdf
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
Effects & Policies Of Bank Consolidation
Effects & Policies Of Bank ConsolidationEffects & Policies Of Bank Consolidation
Effects & Policies Of Bank Consolidation
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
 
Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
 
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...
Remembering my Totem _Unity is Strength_ growing in Bophuthatswana_Matthews B...
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
 
Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent Preferences
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptx
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...
 
Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707
 

Paul Briggs presentation - lLw Society of Ireland.ppt

  • 1. Legal Issues - Purchase of new / used Aircraft Paul Briggs 6 November 2012 ADMIN: 1544 6107
  • 3. Agenda New Aircraft - liability • Excusable / Non-excusable delay - Liquidated Damages • Exclusion of Liability • Unfair Contract Terms Act • OEM warranty – interface commitment Used Aircraft • LOI - Good faith? • Lex situs – transfer of title / creation on mortgage on purchase • as is – where is" - Delivery Condition - Indemnities / Disclaimer - OEM / MRO Warranties • Title Warranty - Liens - Searches • Closing / cash and practical issues © Bird & Bird LLP 2011
  • 4. Who is Paul Briggs? Aircraft business since 1987 • Beaumont & Son • Air 2000: both leasing companies McCann FitzGerald / GPA 1989 to 1991 • Summers in Shannon! Hong Kong / China 1992 / 1995 BAE 1995 / 2004 • Hatfield – BAE Asset Management • Oasis Leasing • Airbus Asset Management • FSTA Twobirds since 2004 • Joint head of Aviation & Defence © Bird & Bird LLP 2011
  • 5. MY AIM Real Law! Yes indeed • Real cases • Real statutes Law is FUN • messin' about with aeroplanes • Train set Business practice and $*$T happens War stories from real deals © Bird & Bird LLP 2011
  • 6. Purchase of a new Aircraft Security: Aircraft from Manufacturer Principles General © Bird & Bird LLP 2011
  • 7. Delay / Breach – Liquidated Damages
  • 8. Excusable Delay Manufacturer not responsible for delays beyond its "control and not occasioned/caused by its fault or negligence" Acts of God, war, natural disasters, slowdown or interruption o f work, labour disputes, failure of sub- contractor or supplier to furnish materials etc – Excusable Delays Termination on Excusable Delay Total Loss • Buyer request a replacement Aircraft; or • Agreement terminates without liability of Buyer © Bird & Bird LLP 2011
  • 9. Non-excusable Delay / LDs Liquidated damages – Seller delay Genuine Pre-estimate of loss? Penalty clauses are unenforceable! Grace period Liquidated damages usually capped Buyer's right to terminate Commercial value of offered LDs? Buyer better off relying on law? Anticipatory Breach Specific Performance © Bird & Bird LLP 2011
  • 10. Washington State / Boeing VAA / Cargolux Late delivery: breach – damages / cancellation Easier to claim – no need to prove amount of loss Boeing aggressively defends LD claims and seeks to negotiate down Really cap of Purchaser's rights Sole remedy? Careful not to remove cancellation right peterson.jeff@dorsey.com © Bird & Bird LLP 2011
  • 11. Buyer Default / PDPs PDPs instalment of Purchase Price not "deposit" Seller right to keep on breach Appreciating market? Correct method of calculating contractual loss of Seller? • Duty to mitigate • Sale to another customer / order book Hadley v Baxendale (1854) party can only claim for losses arising from the other parties breach of contract is the losses are not too remote. There are two limbs to the test: • Losses which a reasonable man would have realised was a 'not unlikely' consequence of the breach (direct losses generally fall under this limb); • Losses which may have reasonably been in contemplation of the parties at the time they made the contract, as a probable result of the breach (consequential or special damages generally fall under this limb). Recent example – enforceability of settlement © Bird & Bird LLP 2011
  • 13. Risk Allocation Airline Protection: • Warsaw Convention 1929 • Montreal Convention 1999 • 1st tier: 100,000 SDRs (EUR 135,000) • Excess: presumed fault of carrier – carrier would need to prove damage not due to its negligence / caused by negligence of another Manufacturer limits liability to express warranties and excludes all other liability Erosion of Airline limits Erosion of Manufacturer limits © Bird & Bird LLP 2011
  • 14. Contribution to 3rd Party Damage Excluded from exclusion to the extent of OEM's relative % of the total fault or other legal responsibility of all persons causing such bodily injuries or damage No standard practice – depends on negotiating position of parties Boeing have offered above carve out Engine manufacturer: concept of joint tortfeasors © Bird & Bird LLP 2011
  • 15. Warranties Manufacturer: Warranted Part – manufactured to design of OEM or having OEM part number will be free from defects in: • Material • Workmanship • Design Expiry of performance guarantees IP Warranty • Patent • Copyright • Software Engines and BFE usually separate from OEM [ATR issues engine warranties] Vendor warranties / Interface commitment © Bird & Bird LLP 2011
  • 16. Exclusion of Liability Manufacturer liability: Contract – Sale of Goods Act 1979 Tort Strict liability Unfair Contract Terms Act 1977 Does UCTA apply • Consumer • Standard Terms - Proper and meaningful negotiation? - All negotiated except exclusion clause? - International Supply Contract S.26 ~ BAe V Amiri Flight ~ Trident Turboprop (Dublin) V First Flight [2009] ~ Air Transworld V Bombardier [2012] High Court If so to which provisions Reasonableness test © Bird & Bird LLP 2011
  • 17. Purchase of second hand aircraft from leasing companies/airlines © Bird & Bird LLP 2011
  • 18. Lex Situs – sales tax / VAT! Structure – usually buyer risk [unless sale and lease back] Number of jurisdictions have "friendly" sales tax regulations and "fly away" exemptions Look through lessor? Greek ATR experience UK Q400 experience VAT – European Court of Justice: Re A Oy C-33/11 International airspace © Bird & Bird LLP 2011
  • 19. Lex Situs – transfer of interest Basic rule: transfer of ownership interest (sale or mortgage) aircraft should be in UK or jurisdiction where transfer will be recognised Evidence Mortgage taking effect at time of purchase • International airspace? • Hamburg • Toulouse Proper law not just governing law Blue Sky • 3 X 747 • 1 aircraft location unknown – English law applied • 1 aircraft in Netherlands • International airspace? © Bird & Bird LLP 2011
  • 20. Documentation dealing with purchase (LOI/Purchase Agreement) © Bird & Bird LLP 2011
  • 22. Good Faith – VistaJet V Shaker LOI contained a provision that where “despite the exercise of good faith and reasonable endeavours” the parties “fail to reach agreement ... before the Cut-Off Date ... [Vistajet/the Seller] shall ... refund the deposit to [Mr Shaker/the Buyer/the Purchaser]” No agreement was reached, despite several extensions to the cut off date The final amendment/extension to the LOI included the following acknowledgement: “notwithstanding the exercise of good faith and reasonable endeavours by all relevant parties" Mr Shaker sued for the refund of the deposit © Bird & Bird LLP 2011
  • 23. Good Faith Vistajet refused to repay on the basis that Mr Shaker had not carried out negotiations in good faith, nor had he used reasonable endeavours to complete the deal. Mr Shaker submitted that:- • such obligations were unenforceable (i.e. agreement to agree); and • VJ estopped © Bird & Bird LLP 2011
  • 24. Good Faith Judgment: • Agreements to use reasonable endeavours to agree or to negotiate in good faith, such as the LOI between Shaker & Vistajet, are unenforceable if “...there are no objective criteria by which the court can decide whether a party has acted unreasonably..” • Duty to negotiate in good faith is unworkable because”... it is inherently inconsistent with the position of a negotiating party...” • Accepted Mr Shaker’s contractual estoppel argument • Terms governing the cut-off date and the return of the deposit were legally binding and that Vistajet was obliged to return the money to Shaker • No leave to appeal – because of estoppel (not good faith argument) [October 2012] © Bird & Bird LLP 2011
  • 25. LOI - enforceability Majority of the LOI terms to be non-binding • Inspection • Board approval Buyer paying deposit will want comfort that the deposit can be returned in certain scenarios: • Failure to deliver Aircraft by [x]; • Non-compliance with the Delivery Condition; • Event of Loss Confidentiality and governing law provisions binding Who holds cash – Jerry Starkes! © Bird & Bird LLP 2011
  • 27. Purchase from lessor with lease attached No physical Delivery Security Interests CPs Novation • New obligation between A and C • Security Cash Maintenance Reserves – reconcilliation Commercial "arm wrestle" © Bird & Bird LLP 2011
  • 28. "as is- where is" Different meanings – causes widespread confusion • Aircraft to meet delivery condition – then legally accepted without warranty; or • It is what it is – buy it is you want it! Airworthy and serviceable? Definition of "Airworthiness from ACG – v – Olympic The court could not identify any previous authority for the meaning of the term “airworthiness” and looked to the world of shipping: "would a prudent operator of an aircraft have required that the defect should be made good before permitting the aircraft to fly, had he known of it. If he would, the aircraft was not airworthy." Caveat – definition was provided obiter – courts need not be bound by the definition © Bird & Bird LLP 2011
  • 29. Operational Indemnities Wide Buyer indemnity in favour of Seller covering losses, costs, expenses, claims etc arising out of: • the sale, purchase, manufacture, ownership, possession, inspection, use, control etc of the Aircraft following Delivery; • Design, article or material in the Aircraft or the operation or use of the Aircraft constituting an infringement of patent, copyright, trademark, design • Occurrence not claims based Exceptions: • Wilful misconduct or recklessness of Seller [gross negligence]; • Ordinary or usual operating or overhead expenses; • Act, omission, event or circumstance before Delivery © Bird & Bird LLP 2011
  • 30. Indemnity Buyer can request a "flip" indemnity covering losses, liabilities etc occurring before Delivery • More limited – subject to Disclaimer • Novating lease – Seller limited warranties about lease and lessee Tax • Buyer usually takes tax risks • Different in sale and lease-back • Stamp, transfer, sales, withholding, value added etc arising in connection with the sale of the Aircraft. • Exceptions: - Assessed on the overall income, profits or gains of Seller; - Wilful misconduct or reckless of Seller; © Bird & Bird LLP 2011
  • 31. Tail Insurance Run off liability insurance 2 years or next major check / structural modification Coverage for aircraft third party, passenger, baggage, cargo etc. Name Seller as additional insured Separate policy Notice of cancellation (NOC) © Bird & Bird LLP 2011
  • 32. Assignment of Warranties Residual OEM warranties / SLP Assignment / Agreement MRO warranties • Paint • Airframe Maintenance • Engine and APU overhaul © Bird & Bird LLP 2011
  • 33. Cape Town / Liens Contract of sale can be registered as a "Prospective International Interest" Seller usually objects • How to remove if sale does not complete priority search immediately before Delivery Liens Generally • Eurocontrol • UK Fleet Lien • N Reg search • MRO - possessory • Airports – Jordan airport! • Fuel • Title insurance © Bird & Bird LLP 2011
  • 34. Closing Bill of sale • possession of original • Escrow • Security Release • Solicitors Undertaking Back to Birth NY Banking Hours Technical Acceptance / Delivery / Legal Acceptance Execution process Deeds – consideration / settlement Opinions Free circulation © Bird & Bird LLP 2011
  • 35. Interesting Topics not covered OEM: fuel burn, city pairs, maintenance costs, training, support PBH / total care Export Control • Blue Sky (again!) Price, Options, Slide Rights, Escalation Documents Certification • NAA • EASA / FAA • CAMO Registration © Bird & Bird LLP 2011
  • 36. About Bird & Bird Key facts: Awarded Global Law Firm of the Year 2009 by the International Council of Jurists 23 offices across Europe, the Middle East and Asia* Over 1000 lawyers and legal practitioners including 229 partners © Bird & Bird LLP 2011
  • 37. Aviation & ADS at Bird & Bird ● Bird & Bird is an international "You can really rely on their deep, specialised "This team makes a notable impression commercial firm focusing on aviation knowledge." Chambers & Partners on the market, particularly in the chosen technology sectors: IP, 2010 aviation sector and is praised for providing clients communications, IT, aviation, with speedy accurate and no-nonsense aerospace, defence and security advice." Chambers & Partners (ADS) 2009 ● Over the last year over 490 fee "The Bird & Bird team has 'a more "The aircraft financing group at earners have worked on Aviation concise approach and working this firm offers a strong sector focus mentality than and lawyers with & ADS projects in 16 of our 21 larger firms – it is business-based, experience working inside the industry." offices dynamic and to the point." Chambers & Partners 2010 Chambers & Partners ● Core strategic sector for 2010 Bird & Bird © Bird & Bird LLP 2011
  • 38. Airlines © Bird & Bird LLP 2011
  • 39. Aircraft investors © Bird & Bird LLP 2011
  • 40. Emerging markets – Middle East © Bird & Bird LLP 2011
  • 41. Emerging markets – Far East © Bird & Bird LLP 2011
  • 42. Sharing your passion working your way for the longhaul across the whole industry crossing the globe touching the metal to help you ‘fly’ that’s Aviation with Bird Bird © Bird & Bird LLP 2011
  • 43. Thank you Paul Briggs Partner Direct tel: +44 (0)20 7905 6353 paul.briggs@twobirds.com Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses. www.twobirds.com