Seller's liability

[jmount99]

Hi, I'm going to sell my Rans S-10. I bought it built, but have recovered and done a bunch of mods.(hydraulic brakes, etc..) I am not a repairman for the a/c. It has been signed off for 10 years by an A+P. I have watched the EAA webcast on selling your homebuilt and downloaded the sale agreement and waiver. I'm very nervous because if you know the a/c, then you know it's a difficult plane to fly and intended for acro. I'm just fishing for tips and making sure I didn't miss anything. Comments?

[AlaskaBill]

If it were me, I'd seek counsel from an attorney familiar with aviation liability issues to make sure I am as well protected as I can possibly be.

[gossend]

But remember, in this country you can sue a ham sandwich. But on the brighter side, if you have few assets no lawyer will take the case.

[LLindsay]

My opinion is the same as AlaskaBill's I think he's right about it completely.

[Forest Hills Cynic]

The Rans S-10 is a dual seat acrobat. Make sure your buyer has a current acrobat rating and give him transitional training. Don’t complete the sale until you’re sure he can safely fly it and have the buyer’s A&P sign off the plane.

The only way you might protect yourself is to put all your assets into an offshore trust (such as a family remainder trust that you don’t control) in some country (New Zealand is frequently used) with secret banking laws that require that the tort be adjudicated in their court under their liability laws and stop working – prior to the sale. This is expensive and controversial.

Then you can tell the scumbag lawyer suing you that as any lawsuit will financially destroy you, ruining your life and make it not worth living – that you will not waste any money defending it, will declare bankruptcy and will kill him and then do it.

[kscessnadriver]

The Rans S-10 is a dual seat acrobat. Make sure your buyer has a current acrobat rating and give him transitional training. Don’t complete the sale until you’re sure he can safely fly it and have the buyer’s A&P sign off the plane.

The only way you might protect yourself is to put all your assets into an offshore trust (such as a family remainder trust that you don’t control) in some country (New Zealand is frequently used) with secret banking laws that require that the tort be adjudicated in their court under their liability laws and stop working – prior to the sale. This is expensive and controversial.

Then you can tell the scumbag lawyer suing you that as any lawsuit will financially destroy you, ruining your life and make it not worth living – that you will not waste any money defending it, will declare bankruptcy and will kill him and then do it.

There is no such thing as an "acrobat" rating. You can get training in it, but there is no rating for it at all.

[s10sakota]

I read somewhere where a guy was selling a kitplane and when he sold it be removed the rudder and the prop. Then he made three different Bill of Sales and sold it all as 'parts'. The idea was that he was selling aircraft parts only and left it to the buyer and his mechanic to assemble it and call it an airworthy airplane. I'm not a lawyer so I don't know if this tactic would hold up in court, but it seems logical. I suppose even if it does stand up in court, you're still going to spend your life savings defending yourself. I should have been a lawyer.

[danielfindling]

I am providing this opinion for academic purposes. For legal advice, contact your lawyer.

There are three major theories of exposure when someone is selling a homebuilt, kit Car (or almost everything). General principles of negligence, contract and product liability. Neither theories will likely result in exposure under the circumstances described in this thread.

Negligence is composed of four sub-parts. A duty, breach, causation and damages. All four elements must be met for a recovery. A 'duty' can be defined as an obligation. For instance, while "puffing" is tolerated in a sale, "fraud" is not. This can loosely be described as a duty to be honest in the sale. The phrase: "as is where is" is often used to negate the duty. For example, actively concealing a known defect would likely breach the duty of honesty in the sale. While saying "the plane is a strong runner" when you really believe it is an "ok runner" would be puffing. In a similar vein, you have a duty to maintain the plane consistent with the FAR's. Therefore having an A & P sign off on the work would likely demonstrate compliance with the duty to maintain or shift the duty to the A & P. The breach of the duty must 'cause' an injury. However, the injury must be foreseeable. For example, consider this example: "if I was not delayed because of the (fill in the blank) the mid air collision would not have occurred" This is not a foreseeable injury, it is too remote. Alternatively, it is foreseeable that a plane using a defective spar could kill someone.

Breach of Contract is simply not doing what was contracted for and is dependant on the language of the contract. (e.g. not fulfilling the promise, misrepresentation, not performing a service, fraud, consumer protection claims etc.)

Products liability varies by State. The restatement of torts (sort of the model used by States) essentially provides that a seller (in the business of selling goods) is strictly liable for the sale of any goods that are sold inherently dangerous in a defective condition. In some circumstances, even if you were not the builder of the goods, you can be liable under a products liability theory. However, you are clearly not in the business of selling airplanes. Therefore, exposure is unlikely (for other reasons as well), even if the airplane is in a defective condition, inherently dangerous.

Notwithstanding the representations I have made above, nothing can guarantee that you will not be sued. However, a lawyer typically evaluates the likelihood of recovery before filing a lawsuit.

Ok, there are risks in life. As a pilot, you appreciate the risks of flying and minimize them, when possible, with judgment.

I would personally sell the plane "as is where is" and pay a lawyer to draft a release of liability. This will minimize, but not eliminate your exposure.

As an aside, to Forrest Hills Cynic was the use of the term "scumbag" in describing lawyers really necessary? You will never forget, or thank a good lawyer enough, when you need him/her.

Daniel

[martymayes]

I read somewhere where a guy was selling a kitplane and when he sold it be removed the rudder and the prop. Then he made three different Bill of Sales and sold it all as 'parts'. The idea was that he was selling aircraft parts only and left it to the buyer and his mechanic to assemble it and call it an airworthy airplane. I'm not a lawyer so I don't know if this tactic would hold up in court, but it seems logical. I suppose even if it does stand up in court, you're still going to spend your life savings defending yourself. I should have been a lawyer.


To completely eliminate liability when selling a homebuilt/kitplane, one has to cancel the registration, then remove and destroy the builder dataplate.

The aircraft's value takes quite a hit in the process. All other shenanigans are just that. Won't fool anyone.

[PropFan]

Excellent post, Daniel.

[CarlOrton]

EAA had an excellent webinar on selling your homebuilt about (?) a year ago.

I can't recall the EXACT number, but the lawyer who was presenting said basically that there has never, or maybe it was only once, been a successful lawsuit against a homebuilder. As others have said above, unless Bill Gates takes up homebuilding, most lawyers will not pursue the case.

The numbers work to our advantage, folks. Now, that doesn't mean we can be stupid about it. Take precautions, have a waiver in place, etc.

[rwanttaja]

Excellent post, Daniel.
Agree with that...thanks for the great write-up, Daniel. As far as lawyers being "scumbags," I changed my opinion of lawyers (to the better) about fifteen years ago, when *I* needed one. The trouble is, he knew so many good lawyer jokes....

One other point I'll add is that I know of only one case where the builder of a homebuilt was sued by the estate of a later owner. The builder was quickly dismissed from the case (though of course he had to hire a lawyer and had to do a lot of worrying). This was the John Denver accident.

Ron Wanttaja

[Racegunz]

Well i might be interested in the S-10, selling it to an EAA member and fellow homebuilder should help some concerns, My first plane was a Rans that the builder de-registered to supposedly protect him from liability, thing is I just called the FAA and filed the paperwork to reinstate it. His name will forever be with the plane unless it is truely parted out, and that really hurts the selling price
. Anyhow if you want to sell it e-mail me. Racegunz@g-mail.com

[Eric Witherspoon]

Well i might be interested in the S-10, selling it to an EAA member and fellow homebuilder should help some concerns...

You have no such goodwill with the deceased's estate / heirs / next of kin, unfortunately. Likewise goes with any waiver / papers you have any other buyer sign. You have no agreement with the buyer's estate / life insurance company, etc.. Though I believe Carl's point is about the best there is - there has been no successful lawsuit against an original builder, and the one example that anyone could come up with, it was thrown out. So I think this thread is a bunch of worry over nothing. When I sell mine, it's already got ~150 hours of "flight test" on it and 3 (or more) annuals. Even though it's not type certified, it sure is proven. If the buyer screws it up, it's obviously not because it was inherently uncontrollable or any such nonsense like that. True, I know that anyone can sue anyone for anything. But I would expect any reasonable attorney to do the research on this and refuse to represent / pursue cases against builders when that big "EXPERIMENTAL" word that the authorities require us to attach to the hardware pretty well lets any pilot know - they're on their own. That right there is probably the heart of the best protection we've got. Of course, I'll print out and require the buyer to sign as much legalese baloney as I can find, just like everyone else... Maybe even follow the lead of what Jabiru engines did of me and require the buyer's spouse also to sign...