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Aircraft Sales

Sale of New Aircraft With Used Engine Supports Claim of Fraud

The Texas Court of Appeals in Dallas ruled this week that a buyer purchasing a new aircraft from the manufacturer made a submissible case of fraud against the seller when it introduced evidence that one of the aircraft engines had previously been used on another aircraft, and that this fact had not been fully disclosed to the buyer.

Washington Decision Rejects Seller’s Reliance on Boilerplate Warranty Disclaimer

The Seattle seller of a used aircraft discovered that its use of an “as is” clause in its general disclaimer of warranties did not suffice to exonerate it from the consequences of delivering an unairworthy aircraft, even after the buyer’s conditional acceptance of the aircraft.

Certificate of Airworthiness Ineffective When Noncompliance with FAR is Present

In Munich v. Columbia Basin Helicopter, Inc., the U.S. District Court for the District of Oregon found that a contract term requiring delivery of an airworthiness certificate by the seller may be breached even when a certificate is provided at the time of delivery.

Court Rejects Claim That Fractional-Share Owner Holds An Interest In Operator’s Entire Fleet

The bankruptcy of fractional-share operator Avantair triggered a dispute regarding exactly what property its fractional-share owners held. Like other fractional-share operators, Avantair operated a fleet of airplanes, selling fractional shares in each of them to individual participants.

Contract Language Calling For Sale “As Is” Prevails Over Airworthiness Provision When Prepurchase Inspection Fails To Note Condition Compromising Airworthiness

The aircraft buyer in McMahan Jets, LLC v. Roadlink Transportation, Inc. discovered that a contract term calling for delivery of the aircraft “in airworthy condition” was not sufficient to protect it from aircraft discrepancies found after the buyer’s prepurchase inspection and acceptance of the aircraft.

“Common Carrier” and “Sale for Resale” Tax Exemptions Denied to Lessor of Aircraft

The Missouri Administrative Hearing Commission has held that a lessor of an aircraft does not qualify for the “common carrier” or the “sale for resale” tax exemptions, even if the lessee of the aircraft would qualify.

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