Purchase agreements for second hand aircraft are entered into between an aircraft owner (as the seller) and, in the majority of circumstances, an airline or aircraft leasing company (as the buyer). The terms of purchase agreements are usually kept confidential between the parties but some terms will be disclosed to a lender to the buyer if it is providing the airline with funding with respect to an aircraft to be purchased in accordance with the terms of that purchase agreement.
There is no standard form purchase agreement with respect to second hand aircraft, although some sellers will have a form of purchase agreement which they prefer to enter into with their customers. The requirements of different parties in relation to second hand aircraft sale and purchases and the commercial details of such transactions vary considerably, and are discussed in more detail below.
Set out below are the most important provisions in a purchase agreement for second hand aircraft.
This clause sets out the aircraft seller’s