One of the most common disputes in a boat sale is when a seller fails to disclose liens or encumbrances on the boat. A lien is a legal claim by a lender or another party usually due to an unpaid loan or repair bill. If the buyer unknowingly buys a boat with an outstanding lien, they may be held responsible for the debt or the boat will be repossessed.

For example, a buyer buys a boat for $25,000. The seller provides a bill of sale but doesn’t mention the boat has an unpaid loan of $10,000. After the sale the lender contacts the new owner demanding payment or threatens to take the boat. The buyer, now facing a financial loss, may take the seller to court for fraud or misrepresentation.

The best way to avoid this is for the buyer to do a lien search before finalizing the purchase. This can be done through the state’s boating authority or the US Coast Guard if the vessel is documented. Also, the bill of sale should include a statement from the seller that the boat is free of liens. A notarized document will further protect both parties.

Failing to transfer the title properly can cause serious legal disputes as ownership is not clear until the process is completed correctly. Without a proper title transfer the buyer may struggle to register the boat, get insurance or prove ownership if challenged. This can cause delays, financial loss and even legal action between the buyer and seller. For example, a buyer buys a used boat and gets a bill of sale from the seller. But the seller never transferred the title into their name after buying it from the previous owner. When the buyer tries to register the boat they are told the title is still in the original owner’s name. The buyer now has a boat they can’t legally claim and a dispute that may end up in court.

To avoid this problem the seller must ensure they have a clear and valid title before selling the boat. The bill of sale should include the full legal names of both parties, the hull identification number (HIN) and a statement of transfer of ownership. Both the seller and buyer should check with their local boating authority to make sure all necessary paperwork is submitted for a proper title transfer.

Misrepresenting the condition of a boat in a sale can cause serious legal disputes especially if the buyer finds hidden defects after the purchase. If the seller provides false or misleading information about the boat’s condition, maintenance history or seaworthiness the buyer may sue for fraud or breach of contract.

For example, a seller advertises a boat as being in “excellent working condition” and includes that in the bill of sale. After purchase the buyer takes the boat out on the water and the engine fails. A mechanic later finds out the engine had pre-existing damage that the seller likely knew about but didn’t disclose. The buyer now faces costly repairs and may take the seller to court to get damages.

To avoid disputes the seller should be honest and transparent about the boat’s condition in the bill of sale. Including an “as-is” clause can help clarify that the buyer is taking the boat in its current condition without warranties. However, the buyer should still request a marine survey or professional inspection before finalizing the purchase. A thorough inspection can uncover hidden problems and make sure both parties enter into the transaction with full knowledge of the boat’s condition.

Non-payment or breach of agreement in a boat sale can cause legal disputes if either the buyer or seller fails to live up to their end of the deal. If a buyer doesn’t pay as agreed or a seller refuses to hand over the boat after receiving payment either party may take the other to court to enforce the contract. For example a seller agrees to sell a boat for $15,000 with a $5,000 down payment and the balance due in 30 days. The buyer takes possession of the boat but fails to pay the rest of the money by the deadline. After multiple failed attempts to collect payment the seller has to take legal action to get the balance or the boat back.

To avoid this problem the bill of sale should include clear payment terms outlining the full purchase price, deposit amount and deadline for final payment. If the sale is being made in installments both parties should sign a written agreement detailing the payment schedule and consequences for default. Using a secured payment method like an escrow service or a notarized agreement can also help protect both the buyer and seller from potential breaches of contract.

Failure to include necessary terms in a boat bill of sale can cause confusion and disputes between the buyer and seller. If key details such as warranties, included accessories or special conditions are missing disagreements may arise after the transaction is complete and potentially end up in court.

For example, a buyer buys a boat thinking it comes with a trailer and GPS system as discussed verbally with the seller. But the bill of sale only states the boat itself without listing the accessories. After the sale the seller refuses to provide the trailer and GPS arguing they were never part of the written agreement. The buyer feels misled and may take the seller to court to enforce the verbal agreement.

To avoid these disputes the bill of sale should clearly outline all terms of the sale including a detailed description of what is included, any warranties and any special agreements between both parties. If the seller is selling the boat “as-is” this should be explicitly stated. Both parties should review and sign the document to confirm all terms are correct before finalizing the sale.