Aircraft Purchase Agreement Template

In plain language: Precisely identifies the specific aircraft being sold by make, model, year of manufacture, FAA registration number, and manufacturer's serial number.

Common mistake: Omitting the engine serial number(s). Engine identity matters because engines are often replaced or overhauled separately, and a buyer expecting overhauled engines must have those specific serials documented to avoid disputes at closing.

In plain language: States the total agreed purchase price, the deposit amount due upon signing, and what happens to the deposit if either party walks away.

Common mistake: Not specifying whether the deposit is refundable and under what conditions. Ambiguity here is the single largest source of post-deal disputes in aircraft transactions.

In plain language: Grants the buyer the right to conduct an independent pre-purchase inspection within a defined window, identifies who bears the cost, and states the outcome — proceed, negotiate, or walk away.

Common mistake: Leaving the inspection facility selection entirely to the seller. The buyer's inspector should be truly independent — using the seller's preferred maintenance shop creates a conflict of interest that can suppress findings.

In plain language: The seller's binding promises about the aircraft's title, lien status, airworthiness, logbook completeness, and compliance with applicable airworthiness directives.

Common mistake: Accepting 'as-is, where-is' language with no representations at all. While common in dealer transactions, a complete absence of title and lien warranties leaves the buyer exposed to discovering an encumbered title after closing.

In plain language: Requires a lien search of the FAA Aircraft Registry and applicable UCC filings before closing, and obligates the seller to clear any liens found.

Common mistake: Skipping the formal lien search when buying from a private individual who 'knows' the aircraft is unencumbered. Aircraft loans are not always reflected in local UCC filings — the FAA Registry search is the authoritative source and must be run.

In plain language: Defines the required condition of the aircraft at the time of delivery — typically the same condition as the pre-buy inspection minus agreed-upon exceptions — and the logistics of physical delivery.

Common mistake: No defined delivery location or an implied obligation that the seller will fly the aircraft to the buyer. If the ferry flight results in damage or an incident, responsibility is ambiguous without explicit delivery and risk-of-loss language.

In plain language: Sets out the escrow agent's role, the sequence of closing actions (fund deposit, document execution, FAA filing, fund release), and the closing deadline.

Common mistake: Releasing funds before the FAA Bill of Sale is filed. The seller receives payment but the FAA Registry still shows the old owner — the buyer has no documented title until the filing is confirmed.

In plain language: States which party bears the risk if the aircraft is damaged, destroyed, or grounded by regulatory action between signing and closing.

Common mistake: Omitting risk-of-loss language entirely. Without it, courts apply default commercial law rules that vary by jurisdiction and may not match either party's expectations.

In plain language: Defines what constitutes a default by either party, the cure period allowed, and the remedies available — forfeiture of deposit, specific performance, or damages.

Common mistake: Drafting seller remedies as unlimited damages rather than capping them at the deposit. Sellers sometimes demand consequential damages for a buyer's breach — courts in many jurisdictions accept a liquidated damages clause as a clean and enforceable alternative.

In plain language: Specifies which jurisdiction's law governs the agreement and whether disputes go to arbitration or court, and where.

Common mistake: Omitting a governing law clause entirely. Aircraft transactions often involve parties in different states or countries — without a choice-of-law provision, courts apply a multi-factor analysis to determine applicable law, creating cost and uncertainty.

An aircraft purchase agreement is a legally binding contract between a seller and a buyer that documents all material terms of a civil aircraft sale — purchase price, deposit, pre-buy inspection rights, title and lien warranties, escrow procedures, delivery conditions, and default remedies. It governs the transaction from the time the parties agree on price through the closing and title transfer at the FAA Registry.

Yes. The aircraft purchase agreement is the governing contract for the transaction; the FAA Bill of Sale (Form 8050-2) is the title transfer document filed with the FAA Aircraft Registry at closing to update the official ownership record. Both documents are required — the purchase agreement without the FAA filing leaves the buyer without documented legal title, and the FAA filing without a purchase agreement leaves the parties without enforceable contractual protections.

For straightforward private-party piston or turboprop transactions, a well-completed template reviewed by an aviation attorney is typically sufficient. For high-value business jet acquisitions (generally above $1M), international purchases, aircraft with financing contingencies, or deals involving complex maintenance histories, engaging an aviation attorney is strongly recommended. Legal review for an aircraft transaction typically costs $500–$2,000 and is a small fraction of transaction risk.

An escrow agent — typically an aviation title company — acts as a neutral third party that holds the buyer's funds and closing documents until all conditions of the purchase agreement are met. The escrow agent then simultaneously files the FAA Bill of Sale and releases funds to the seller, ensuring neither party is exposed: the buyer's funds are not released before title is transferred, and the seller's title is not transferred before payment is confirmed.

A pre-buy inspection should include a review of all logbooks and maintenance records, confirmation of AD compliance, a physical inspection of the airframe and interior, engine compression tests and borescope inspections, avionics function checks, and a test flight. The scope should be documented in a written work order before the inspection begins, and all findings should be delivered in a written squawk list that becomes part of the purchase agreement record.

The purchase agreement should define three options when material discrepancies are found: accept the aircraft as-is at the agreed price, negotiate a price reduction or seller-paid repairs, or terminate the agreement and receive a full refund of the deposit. The agreement should specify a dollar threshold — typically $5,000–$25,000 depending on aircraft value — above which discrepancies trigger buyer renegotiation or termination rights.

The FAA regulates aircraft registration for all US-registered aircraft regardless of which state the transaction occurs in, so the federal registry process is uniform. However, state law governs the contract itself, sales tax obligations, and UCC lien filings — and these vary significantly. Sales or use tax can range from zero to over 10% depending on where the buyer takes delivery and registers the aircraft. A governing law clause and pre-closing tax advice are both important for multi-state transactions.

Yes, but significant modifications are needed. International transactions involve export airworthiness certificates, de-registration from the seller's national registry, and re-registration in the buyer's country — each with different timelines and requirements. The purchase agreement should address which party is responsible for each regulatory step, include currency and exchange-rate provisions if payment is not in USD, and specify which country's law governs the agreement. Aviation-specific legal counsel is strongly recommended for cross-border deals.

In the US, state sales or use tax is typically the largest tax exposure and varies by state — some states exempt aircraft sales entirely, while others charge rates of 6–10%. The tax is generally owed in the state where the aircraft is first based after purchase, not necessarily where it is delivered. Federal excise tax may apply in certain commercial contexts. Buyers should obtain a state-specific tax analysis before closing to avoid unexpected assessments.