Legal Question in Aviation Law in California

I'm a seller of an general aviation airplane, we are in escrow awaiting a pre-purchase inspection. The buyer has deposited funds into the escrow account. I've decided not to sell the airplane, what are my legal options. I've also signed the forms to transfer ownership through the FAA once the sales contract is signed.

Asked on 3/10/12, 7:19 pm

1 Answer from Attorneys

Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE
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People are often emotionally attached to their boats, aircraft, etc. and I will resist the urge to send you to ShrinkGuru.com to have yourself psychoanalyzed -- even though you are about to tick off a few people and give yourself a reputation that will follow you to your next aircraft sales transaction.

First, read the contract and familiarize yourself with whatever penalties it provides in the event of a breach. Where the contract is silent, the measure of damages for a breach of a contract for the sale of goods is governed by Uniform Commercial Code Section 2-711 and related sections.

If the goods are "unique," the buyer could petition the court to force you to sell him this particular aircraft ("specific performance"). A 50 year old Piper Cub might be more likely to be found "unique" than would a late-model Cessna. Breaches of contracts to sell non-unique goods are compensable only in money.

2-711. Buyer's Remedies in General; Buyer's Security Interest in Rejected Goods.

(1) A breach of contract by the seller includes the seller's wrongful failure to deliver or to perform a contractual obligation, making of a nonconforming tender of delivery or performance, and repudiation.

(2) If the seller is in breach of contract under subsection (1), the buyer, to the extent provided for by this Act or other law, may:

(a) in the case of rightful cancellation, rightful rejection, or justifiable revocation of acceptance, recover so much of the price as has been paid;

(b) deduct damages from any part of the price still due under Section 2-717;

(c) cancel;

(d) cover and have damages under Section 2-712 as to all goods affected whether or not they have been identified to the contract;

(e) recover damages for nondelivery or repudiation under Section 2-713;

(f) recover damages for breach with regard to accepted goods or breach with regard to a remedial promise under Section 2-714;

(g) recover identified goods under Section 2-502;

(h) obtain specific performance or obtain the goods by replevin or similar remedy under Section 2-716;

(i) recover liquidated damages under Section 2-718;

(j) in other cases, recover damages in any manner that is reasonable under the circumstances.

2-712. "Cover"; Buyer's Procurement of Substitute Goods.

(1) If the seller wrongfully fails to deliver or repudiates or the buyer rightfully rejects or justifiably revokes acceptance, the buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

(2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (Section 2-715), but less expenses saved in consequence of the seller's breach.

(3) Failure of the buyer to effect cover within this section does not bar him from any other remedy.

2-713. Buyer's Damages for Non-delivery or Repudiation.

(1) Subject to Section 2-723, if the seller wrongfully fails to deliver or repudiates or the buyer rightfully rejects or justifiably revokes acceptance:

(a) the measure of damages in the case of wrongful failure to deliver by the seller or rightful rejection or justifiable revocation of acceptance by the buyer is the difference between the market price at the time for tender under the contract and the contract price together with any incidental or consequential damages under Section 2-715, but less expenses saved in consequence of the seller's breach; and

(b) the measure of damages for repudiation by the seller is the difference between the market price at the expiration of a commercially reasonable time after the buyer learned of the repudiation, but no later than the time stated in paragraph (a), and the contract price together with any incidental or consequential damages provided in this Article (Section 2--715), less expenses saved in consequence of the seller's breach.

(2) Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.

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3/10/12, 11:03 pm

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