lawsuits

[flight193001]

If a person sells a boat they have built, should they insure themselves against litigation? Should they guarantee it?

[Thad Van Gilder]

I have found that the people that buy wood boats aren't the kind of people who are out to get you.
I never worried about it.

-Thad

[JimConlin]

If you can find someone who will write such insurance at tolerable cost, let us know. Absent that, I'd be sure that the boat was up to snuff in structure, flotation and other safety issues and that the buyer knew the boat's limitations. If I were not confident that the buyer wasn't going to do something stupid like paddle a canoe to Bermuda, I'd get him to sign an acknowledgement of the boat's limits.
Surely there's a lawyer in the house who can draft such a note.

[David123]

Private Investigator here....

The bill of sale should read , at the very least, "No warranties either expressed or implied ." with a seperate line for initials on that clause.

AS sure as you could get a lawyer to draft you a contract of sale the buyer could retain the firm of Dewey, Cheatem and Howe to take you to task without one.

[ 08-30-2005, 10:45 AM: Message edited by: David123 ]

[Ian McColgin]

Actually, there are standards one must meet. If you make and sell the occasional human or sail powered craft, there's little risk. If you're in production, better check USCG and ABYS standards.

[Bob Smalser]

Careful now, fellas.

Any warranty release on a bill of sale is totally worthless if it can be shown to the court's satisfaction you've used inferior materials or workmanship, causing a failure.

Do it right the first time using proven marine materials. Under the law as I understand it, the buyer isn't spose to know that particle board and white glue aren't safe boatbuilding materials...the builder is. There's your "insurance"....building to a proven standard.

[ 08-30-2005, 11:27 AM: Message edited by: Bob Smalser ]

[JimConlin]

What Bob said. If the boat is built to the design of a respected designer and scantlings and details are substantially as designed, you've got some cover. Substitute lauan for BS1088 ply and add a flying bridge and you're on your own.

[Ian McColgin]

My old manuals sleep with the fishes, but you should do just a little google to find stuff like:

http://www.uscg.mil/d8/mso/louisville/download.htm

Also you must have a hull identification number on the boat, issued by your state boating law administrator.

Also check: http://www.uscg.mil/d8/mso/louisville/download.htm

If it feels like too much work, just compare it to the work you could get into with some dingaling's heirs.

G'luck

[George Roberts]

flight193001 ---

You should guarantee it.

You should have deep enough pockets to make the buyer whole if you made a mistake. Insurnace helps.

[Chub]

Originally posted by Thad Van Gilder:
I have found that the people that buy wood boats aren't the kind of people who are out to get you.
I never worried about it.

-ThadBe careful, I have found out the hard way, (not boat related) that suing is an acceptable form of income for some low lifes. Although it is true that most custom boat buyers are good people, it only takes one bad seed to destroy your whole world.
It almost seems that suing for enough to retire is the "New American Dream"

[Gary E]

You didnt say if your intending to build as a biz or just sellin teh old leakytiki...

If just selling... it's aready said, but the buyer is buying it....

AS IS... WITH ALL it's FAULTS BOTH SEEN AND NOT SEEN...

Everyone wantz a farkin garrraaaaaaannteee in life....

Do what house builders do... build unner a LLC or other corp name, sell the whatever, disolve the corp... now you cant be touched, now letz hear from someone who IZ a lawyer or at least plays one on TV...

Litttle side note here...
We used to sell USED Punch Presses...when OSHA required all the safety features of a new press, it sorta made used presses worthless except to people that knew what to do with them. So, to get the used press out of our hands and into the buyers, they agreed that what they were buying was SCRAP MACHINERY

[ 08-30-2005, 04:06 PM: Message edited by: Gary E ]

[Billy Bones]

Geeezlaweeez. Lately everyone has been answering other people's answers and ignoring the initial question. You asked:


If a person sells a boat they have built, should they insure themselves against litigation? Should they guarantee it? ...which sounds like you built yourself a boat, used it for a while, and now wish to sell it. In which case, no you don't need insurance, nor would you need to guarantee it, assuming it's in good condition and is fairly represented. You might encourage prospective buyers to get a survey if they are hesitant. If on the other hand you are talking about anything which could even vaguely be construed as a commercial operation, then yer durn right you need insurance and a lot of other stuff besides, which see Ian's posts for a start.

[Bob Smalser]

As one who's done a few accident investigations, both marine and otherwise, I wouldn't totally buy into Billy's warm fuzzy, here.

This isn't just any buyer-beware used boat. You are the builder of record, and the boat was probably built recently...like well before neglect becomes an issue. The buyer likely knows all that, and the builder of record is on the boat's title in most states, anyway.

Does that mean the boat has to meet 100% of USCG/ABYS Standards? Probably not.

Does that mean if you used unproven materials/methods that fail resulting in harm, that a court won't find against you in a lawsuit? Don't you bet on it. The qualified marine surveyor hired by the plaintiff will rip your MDO and yellow glue or construction adhesive or other non-marine practice a new asshole in court, with a large stack of irrefutable manuals to back him up.

And that may be whether those non-marine practices were the true cause or not. It's like having a fire in a house full of obvious handyman electrical code violations...an investigator's path of least resistance to proximate cause.

So if you are selling a boat built to a proven design and standards, then look the buyer straight in the eye and sell your boat with confidence.

But if the boat is built to standards more suitable for a cheap tract house than a well found yacht, that contractor's short-term Limited Liability Corporation and builder's liability coverage may not save you either, if a case can be made for criminal negligence. I don't think they'd make you feel any better if somebody gets hurt as a result of your shoddy work, anyway.

[ 08-30-2005, 11:59 PM: Message edited by: Bob Smalser ]

[Billy Bones]

Bob, I read nothing in the original question to substantiate your string of "if, may, probably, assuming, likely" qualifiers. But if there is something I'm missing and they're correct, then you're probably right.

But (again, unless I'm missing something) there is absolutely no reason or excuse for statements like...
your MDO and yellow glue or construction adhesive or other non-marine practice and...


if somebody gets hurt as a result of your shoddy work And I'd have thought the 'Billy's warm fuzzy' shot was beneath you.

[Bob Smalser]

Originally posted by Billy Bones:
(again, unless I'm missing something) Yes. I've seen your work, and don't see you recommending OSB for planking any time soon. Our only significant disagreement here is whether home boatbuilders need to think about potential lawsuits before selling.

[Billy Bones]

Our disagreement is whether flight193001's work is crap or not. We don't have enough info to judge either way. But if this forum is to be useful to its members it's best we don't assume everyone who comes through the door is an idiot.

[ssor]

In my observations any lawyer worthy of the title wiil name everyone that may have a connection to the product as defendants. That means the builder, the supplier of the lumber, the supplier of the adhesives, the manufacturer of the adhesives and quite posibly even the creator.

[Uncle Duke]

Let me ask related question for you folks....
John Doe buys boat built by commercial, reputable builder.
John modifies deck or interior layout, but not hull or systems.
What is John's liability there, beyond disclosure of modifications (presumably to include materials list, etc.)??
I guess the question is "where does liability begin"?

[ssor]

Maryland doesn't let the plaintiff off the hook entirely, we have a contributory negligence law here. Which basicly says that if I warn you of danger and you walk into it anyway and get hurt, YOU KNEW BETTER, YOU HAD BEEN WARNED!!!

[ 08-31-2005, 01:48 PM: Message edited by: ssor ]

[Gary E]

Originally posted by ssor:
Maryland doesn't let the plaintiff off the hook entirely, we have a contributory negligence law here. Which basicly says that if I warn you of danger and you walk into it anyway and get hurt, YOU KNEW BETTER, YOU HAD BEEN WARNED!!!Agree, and everyone should be warned that the beer can holder could fall off and onto your girlfriends painted toes, or you could run into a partially floating log or telephone pole and sink the tub.
AND KEEP IN MIND...no mater what happens...it's ALL YOUR FAULT...

[ 08-31-2005, 01:56 PM: Message edited by: Gary E ]

[Reilly, Mark]

Is the boat new, or was it used by the builder first?

[Wes Kisting]

My two cents... with the legal system as it is, there's no such thing as a "guarantee" against being sued. But you can take reasonable precautions.

I would think it would lend you a reasonable amount of security if you write up a quick bill of the building materials used, along with any known problem areas (i.e., "leaky centerboard needs attention"; "minor damage to fiberglass at stern," and such).

Even if the boat is technically finished by your standards, I would have the buyer sign a statement written something to this effect:

I ___(buyer)____ agree to purchase ___(boat name and description)____ from ___(builder)___ with the understanding that I am purchasing an unfinished, "project boat" to complete and use according to my own wishes. I understand that ___(buyer)___ makes no claims to be a professional boat builder, and I agree to assume sole responsibility for determining whether the boat, its construction, and its materials (bill of materials attached) are fit for the uses which I intend. I understand that as a "project boat" which has not been produced for commercial sale, it is my responsibility to determine and meet any particular safety regulations required by law before using this boat for any purpose where such regulations may apply. I also understand that the seller offers no warranty or guarantee of any kind concerning materials, quality of construction, or seaworthiness.

I think that would give you protection from most of the major issues that arise... but of course, a good lawyer could still find a way to sue you, perhaps... Still, better to have a waiver. Just be sure to keep it somewhere safe (a safe deposit box?) for many, many years.

[Wes Kisting]

Sorry... I didn't get a chance to finish my post because I got called away on an errand.

About the waiver I describe above... I think the reason it would be smart to sell the boat as a "project boat" is because this way the buyer acknowledges that the boat does not necessarily already meet safety and legal regulations. Most buyers would probably be willing to sign such a waiver, and it would be hard to sue you later if you can prove (with a signed copy of the waiver) that the buyer knew what he was getting into.

A last thought... you also have to be careful how you advertise the boat for sale. Some advertisements make implicit claims, like: "She sails beautiful in even the roughest conditions... we've even pushed her hard without reefing in 40 knot winds..." Naturally, making claims like this (even if true) could raise a liability issue later when some unsuspecting buyer with no sailing experience decides to try his luck at the same feat, and then decides to sue you for poor design or false advertising when someone ends up injured or dead. Better not to make any great claims about the boat, just be honest about its construction and any "problem areas," and then advise safety.

[kpenokie]

When you ask for legal advice on a wooden boat forum, you get what you pay for. I didn't see the word lawyer in any of the responders profiles soooo...... If you are concerned, ask a lawyer in your area as many consumer and liability laws are state specific. If you follow her/his advice you have the extra protection of being able to sue the lawyer if things go bad.

[Dale R. Hamilton]

Here's where the Coast Guard can really help you guys. First of course you build to NEMMA (not sure I got that right) standards- using proper materials and workmanship. You don't cut corners on marine grade components, THEN you call the USCG Recreational Boat Factory Visit Program- my contact is Mike Haley 704-299-5526. They will visit and inspect your shop and your construction, offering everything you need produce a safe boat. This is all free and they are very helpful. They have inspected me twice and I am very grateful.

[George Roberts]

Dale R. Hamilton ---

That is not quite what the USCG Recreational Boat Factory Visit Program does.

While they are concerned with compliance with the boat building regs, there are not that many regs.

For my kayaks they only check that the HIN is in the right place and has the right format.

[Spissgatter W-9]

kpenokie is right on. Unless you are an attorney licensed in the state where the questioner resides, you really have no business giving your opinion. (Practicing law without a license in fact).

I wonder aloud why his question is put in the "Building/Repair" forum anyway. I see an increasing trend to use this category for any question that pops into someones mind. So, would appreciate some self restraint not only on posting questions but also on replys beyond area of expertise. Failure to respect the categories afforded forumites erodes the utility of the the WoodenBoat Forum.

[Wes Kisting]

For the record, I did run the issue by a law professor here at the U of I, which is how I arrived at what I posted. But it's true, the protective solution we came up with (see posts above) may fare differently in different states, so OF COURSE it's worth checking into.

But as for the "forum police" who insist we have no business posting an opinion... that's what the guy asked for. I doubt he expected he was asking trained lawyers... just guys with boats who, in some cases (like my own) may have access to reliable legal advice. I broached the issue with the law professor not to answer this post, but because I had the same question when I considered what I would do if I sold my own boat. I think it was a worthy question, and I for one appreciate hearing all the opinions so I don't have to go ask for legal advice only to have a lawyer who is unfamiliar with this particular issue (and really, how many actually specialize in boat sales law... or retail liability in general, for that matter?) fail to consider something that maybe someone here on the forum could tip me off to in advance.

Lastly, I think it fits nicely here in the building section since, as many of the posters have noted above, the legal issue in this case is, at heart, an issue with the quality of building methods and materials... whether built to standards or not. It fits as well under this heading as under, say, "people and places" or a broader, vaguer category.

I am suspicious of the claim that only people with degrees know what they're talking about. I've gotten better legal advice from some laypeople than many lawyers I've encountered. What's more, I have a Ph.D. in English, but plenty of simple folk without Ph.D.'s can read, write, and speak as well as (or better) than I... all without a similar degree.

Just my two cents. Again, not a lawyer OR a forum expert. And for the record, no hostility was intended anywhere in the tone of this message, so I hope it doesn't sound too blunt to some of the more sensitive posters.

[Wes Kisting]

Clarification... I did NOT run the actual language of the waiver posted above by the law professor. We just discussed the issue and agreed that the safest protective course was to have the buyer purchase the boat under the agreement that it was an "unfinished project boat" which would become the buyer's responsibility to bring up to necessary codes and regulations prior to use.

I just wanted to make that clear so no one thinks the waiver I posted above (as an example) should be used verbatim...

[George Roberts]

Wes Kisting ---

I am not sure that the words "unfinished project boat" offer any protection.

[Gary E]

In the real world, I will NOT SELL to OR BUY from a guy that think's like they might need a legal beagel...your buying AS IS .. PERIOD.

THere must be some underlying reason why this guy started this thread, did he get screwed on the last deal he made?

[Wes Kisting]

Gary, I agree with the sentiment, but IMHO it's naive to ever conduct a transaction without a statement of intent and expectations. The small claims courts in virtually every state are overwhelmed with a superabundance of disputes precisely because people are not professional enough when conducting transactions. That's why show's like The People's Court, Judge Judy, Judge Joe Brown, (and so on, ad nauseum) never lack material for their shows... Bottom line, whether you consult a lawyer or not, the FIRST thing any judge will ever ask you if you are taken to court is: Do you have a copy of the agreement that you signed for the sale? (you can confirm this just by sitting in on a small claims case sometime... because it's the central issue at the heart of 99% of the cases that show up). Most people end up twiddling their thumbs saying something like, "Gee, I thought I could trust the guy or I wouldn't have done business with him in the first place." Know what the judge says? "It's your word against his. Case dismissed." (In fact, this is why so many families and friends end up in court... because when they conduct business with each other, they're always "trusting" their relative/friend won't dupe them or turn around and sue them, so they don't sit down and forge/sign a contract regarding the expectations and liability of the sale.)

Now here's where it gets interesting... in the event someone gets injured, slightly or seriously, as a result of the transaction, the burden of proof shifts onto the shoulders of the seller to "prove" that an unsafe condition did not result from implicit promises made during the transaction (i.e., promises about what the boat is capable of doing, what uses it can be put to, how much abuse or extremity of usage it can take, durability, safety, etc.). If it boils down to your word against the word of a buyer who sees a fat paycheck in his future at your expense, the judge is probably going to side with the buyer who is suing you--all he has to prove is the very tangible evidence that he was injured (medical records) and that the injury resulted from an accident related to what you sold him (pictures of the wrecked boat, or a leaky bilge, or a broken mast step or a faulty hatch that gave out... whatever... but all things that could happen on a fluke even to a well-built boat); meanwhile, you are left trying to prove the very intangible particulars of what you did or did not say when selling the boat. And of the anecdotal cases the law professor shared with me (not boat-related, but very similar circumstances of liability), the judgment usually sympathizes with the buyer (ahem... victim of injury).

Again, you don't have to take this as gospel, and yes, everyday lots of people make sales that never turn into lawsuits (true of the vast majority, in fact). However, it's sort of like not having a spare tire on your boat trailer... the first time you get a flat (one in a thousand, or one in a million times), the FIRST thing you think to yourself is "How could I have been so dumb not to be prepared for this?"

I, for one, will always carry the spare tire.

[Wes Kisting]

Sorry George, I didn't see your post at first.

The reason for "unfinished project boat" in the language is as follows:

My legal friend tells me that what makes the liability issue in this case unique is precisely the fact that what you are selling is a boat you built yourself on a limited production (usually one boat, in the case of homebuilders)... as such it acquires unique liability issues as a quasi-experimental craft which may be looked at by the law, after the fact, as having been patently unsafe. This is mitigated to some extent if the boat you built was built to a set of established, licensed plans... nonetheless, since you are the builder of record and the source of the craftsmanship, the liability will revolve around whether or not you produced an unfit vehicle and then recommended it for use (implicitly) by selling it as a "boat" or "watercraft" instead of a "thing to work on and make your own."

If the buyer signs a statement acknowledging the boat as an "unfinished project boat", the liability is (in theory) greatly mitigated because by signing, the buyer is acknowledging that he is not purchasing a boat per se (at least not a finished one that is ready and suited for the water... even it floats already as is), but rather a boat which (as the rest of the waiver's language should reflect) becomes HIS or HER responsibility to "bring up to the appropriate rules and regulations prior to use."

The USCG regulations for Backyard Builders don't typically apply unless you are selling enough boats to be considered an active commercial builder (not sure if there's a specific number of boats you can build before you're considered this, or if it's just at the USCG's discretion). However, my legal friend assures me that a very good lawyer could still have you sued for not meeting these regulations even if you've only built and sold one boat.

One of the regulations, for instance, is that the boat must have a certain square footage of built-in foam flotation in proportion to its weight... something a lot of builders dismiss in favor of air-tight storage compartments, especially on small pocket cruisers like my own (www.roguepaddler.com/boat.htm). In fact, this particular issue is what prompted my discussion of liability with the law professor... I'm not looking to sell my boat anytime soon, but I became interested in the question of liability nonetheless. To put enough flotation in my Pocket Cruiser to meet the Backyard Builder regulations, I would effectively fill the storage compartments to the brim, making the boat useless as a Pocket Cruiser to me and to anyone who might otherwise have considered buying her (no space for gear... what good is it?)

Anyway, I've said enough. Again, I make no claims to being a lawyer myself, and my legal friend is not a specialist in contract liability issues. But we both have good heads on our shoulders, and he has some legal know-how... together, we agree that telling the buyer up front that some regulations (legal or safety-related) may not have been met in the construction of the boat is a GOOD idea, and being able to confirm it with a document later (in the event of being sued) is even better. Sad that the law requires you to anticipate other people's stupidity, but it does... that's why people can sue McDonald's for having hot coffee, and require them to now print on the cup: "Caution, contents may be hot!"

Cheers.

[Gary E]

Wes,
Are you a lawyer?

yeah, be prepaired is the Boy Scout Motto

One example is a ONE wheel trailer we had in the 50's, we did have a spare for it and needed it in the middle of a vacation. I wont take any credit for that, but Dad did and he also figgered out how to change that tire with the trailer fully loaded.

and I try to be.

[Bob Cleek]

Well, I AM a lawyer and I'll tell you all that there is no way to prevent anyone from making a claim. The issue is whether the claim has any chance of success. Granted, even if you win, the cost of defense can be high.

Given that, I'll also say that the laws vary with each jurisdiction and each case varies with its unique facts. Thus, there is no way to assure anyone that they can insulate themselves from liability, justified or not.

What Bob Smalser says is very true. If you do good work consistent with industry standards, you will go a long way towards protecting yourself. Also, if you make representations that aren't true, you are really asking for trouble.

Now, one thing that is generally true is that liability for a homebuilt boat isn't the same as liability for a professionally built boat. There is a principle of products liability law that holds that if a person puts a "product" in the "stream of commerce" they are liable to those who may use it in good faith. This is intended to hold commercial manufacturers liable for making, advertising and selling (putting into the stream of commerce) unsafe products. This is different that a guy selling a little boat he built himself when he is through playing with it. Commercial builders are held to a "higher standard of care."

That said, ask yourself, would you be worried about being sued if you sold a used car you had fixed up? While you could be liable if that brake job you did caused the buyer an accident, all things considered, we sell used cars all the time without losing sleep over it.

It isn't possible to avoid all of life's risks, as Katrina reminded all of us. The best protection against getting sued, if any at all, is being honest.

[sbsbw]

couldn't you just build a release of libilty into the title. IE add a clause that prevents any owner from sueing you.

however to me it would seem the larger problem is passingers, they are not held by the agreements that the owner has signed

[Wes Kisting]

Gary... no, as said above, I'm not a lawyer. I discussed this issue with a law professor here at the U of IA. (I teach English here).

Bob... I agree, as said above, that there's nothing you can do to prevent someone from making a claim. My discussion above was discussing how to mitigate the likelihood of actually being held financially/personally liable in the event of such claims. My legal friend gave roughly the same take that you offered above (i.e., there is a real difference between a home-built one-off boat vs. commercial production on a larger scale); however, his concern was that any serious liability issues (with real potential to result in a judgment against the builder) would stem from questions of the implicit promises made during the transaction... i.e., the assumption of seaworthiness, safety, compliance with regulations, etc. that is TACITLY (i.e., unspoken, but assumed) promised if the seller neglects to mention the issue. But after the fact, the only way to "prove" that you (as seller/builder) did in fact make the buyer aware of such issues is if you have them sign a waiver (or contract... whatever you want to call it) acknowledging the potential for noncompliance with certain safety standards and regulations. Hence the value of referring to it as an "unfinished project boat" which the buyer becomes responsible for completing in accordance with local and established rules and regulations.

As you rightly note, the law can vary from state to state... even if you might defend yourself on the basis that you built the boat to the standards applicable in your own state, we still thought it was best to have the buyer acknowledge responsibility for the three major issues of liability: (1) investigating the soundness of materials, (2) determining the proper and safe uses of the boat, and (3) completing the boat in accordance with the rules, regulations, and safety standards which may apply in their particular locale. It sounds complicated, but it's all expressed in the paragraph I posted many posts ago... the wording could be tweaked, perhaps, but I really think a lot of buyers would be happy to sign such a waiver/contract/bill of sale... it doesn't oblige anything risky... it just puts on paper what other posters have here said in simple terms: that the boat is sold AS IS, and becomes the buyer's responsibility.

I'd still prefer to have the waiver. That's the way I'll do it, and if it means a few potential buyers are scared off by the request that they sign a waiver, fine... I'd only want to sell my boat to someone who is willing to sign, in writing, that they acknowledge full responsibility for any use or adaptation of the boat which might occur after it leaves my possession. Very fair, and very smart IMHO.