Concept of a Trailer Sale Agreement
A trailer sale agreement is essentially a legally binding sales contract specific to the purchase or sale of a trailer. It provides a clear definition as to the parties involved in the transaction, contains relevant information about the trailer being sold, and spells out the terms and conditions of the transaction. While it’s a fairly straightforward document used to buy and sell those who buy or sell trailers a similar sense of security that a bill of sale provides when buying or selling standard motor vehicles.
Such an agreement offers protection to those who use it. In most cases, it’s going to be drafted by a lawyer, who will take the time to ensure it covers all relevant details of the sale , and covers the buyer if there is a problem after the sale. If you’re a seller, you want to ensure that the buyer will have no cause to pursue you for help in the event a problem arises. If you’re the buyer, you want to know that you’re protected should there be an issue with the sale.
While it may seem overkill to some, we believe that having some type of record of the sale, even if it’s not required by law, is fairly standard. It’s good business. It gives you peace of mind that you’re both legally protected should there be any problems during or after the sale. If you don’t want the hassle and worry of potentially having a problem in the future, removing as much of that as possible is just a smart way to do business.
Key Features of a Trailer Sale Agreement
When entering into a trailer sale transaction, it is vital that the agreement be clear and unambiguous in its terms to avoid later disputes. Key elements of a trailer sale agreement should include:
(i) parties involved
(ii) details surrounding the trailer (a short description, including the VIN), and any inclusions or exclusions (such as furniture within the trailer) and related equipment (for example, weights for towing);
(iii) how the sale price will be paid, including any deposit required;
(iv) the status of warranty protection for the trailer and any included equipment;
(v) transfer or assumed liability or obligations by the buyer;
(vi) applicable taxes;
(vii) closing timeline (including transfer of insurance to the buyer of the trailer);
(viii) specific disclosure of financing for issuance of a Certificate of Ownership to the buyer of the trailer; and
(ix) delivery, acceptance and notices procedures.
It is also advisable to have the agreement properly witnessed and executed by all parties.
Legal Considerations of a Trailer Sale Agreement
The written trailer sale agreement may be governed by federal or state law depending upon the specific transaction. The Magnuson-Moss Warranty Act governs the transactions of certain consumer products in interstate commerce. The Federal Trade Commission rules concerning warranties and the Disclosures of Written Warranties and Extended Warranties on Warranties and the impact of the Magnuson-Moss Warranty Act applies to the trailer sale transaction. 15 U.S.C.S. § 2301-2312.
In addition, some states have enacted laws governing the sale of trailers. The State of Florida has, for example, created a number of specific requirements and obligations applicable to trailers in general under Fla. Stat. § 317.67(9), 317.765, 376.305 and Fla. Adm. Code R. 62N-10.310. Generally, these Florida statutes and administrative regulations govern the purchase of the trailer, the mortgage on the trailer, the sale of a trailer if damage is caused by another and the sale of insurance for the trailer. See also Fla. Stat. § 219.5115 (governing the sale of the trailer in a voluntary or involuntary disposition). All transactions should be reviewed by qualified counsel to confirm that the sale is enforced in accordance with any applicable federal and state laws, rules and administrative regulations.
Typical Mistakes in a Trailer Sale Agreement
One of the most common and costly mistakes is proceeding with a draft agreement drafted with a standard form without any reference to the specific situation. For example, it is common for one party to assume a liability that it agreed to hold harmless to its own insurance policy. Another common mistake is the identification of the parties. Without identifying the capacity of the party, for example, the seller party may have been a company or a sole proprietorship. The final most common mistake is an unsigned printed purchase order. Many purchasers believe that a printed unsigned order when countersigned will be sufficient to make sure there is an essentially long-term agreement. This is because the supplier and the purchaser have an agreement and the supplier should be able to rely upon the order form to avoid making a new printed agreement. While these are common mistakes, even more fatal mistakes can be avoided by at least consulting with legal counsel.
Putting Together a Trailer Sale Agreement
Creating a successful trailer sale agreement involves taking a few important steps to ensure that both parties are adequately protected and that the terms of the transfer are well understood and agreed upon. Properly following through on these steps should result in a more agreeable and easier transaction for everyone involved.
First, clearly identify all parties to the trailer sale agreement. This includes both the buyer and the seller of the trailer. Be sure to include the legal name of each person or business entity involved.
Second, accurately identify the exact make and model of the trailer itself. Also include information such as its identification number, the current odometer reading, title number and lien status, if applicable.
Third, list all of the trailers accessories, features and any other information that would be needed to fully describe the trailer . Do not forget to include any straps, covers, tools, or other items that might have been sold as a part of the trailer.
The next part of the sale agreement is relatively simple: include all of the purchasing terms. This includes the total purchase price, deposits required, payment schedule, and acceptable payment methods.
You might also choose to include information about the distribution of taxes and fees. If you are a business, this amount may be significant, and it is important that both parties know who will absorb how much of the cost.
Finally, include any disclosures, warranties or representations attached to the trailer. Without these provisions, you may be faced with unforeseen complications in your transaction that for families that have been unable to collect what they believe they are owed.
Negotiating a Trailer Sale Agreement
Buying an old trailer on eBay is very different from buying a house or a car. You may not have the opportunity to have the trailer thoroughly inspected before paying for it. You cannot take out a mortgage on a trailer. You don’t have to pay sales tax, and who knows what that trailer’s bluebook value is. Because both buyers and sellers are at a disadvantage, great care should be exercised in negotiating the terms of the sale to ensure both parties’ interests are protected. The following are a few key terms to focus on:
Condition of the Trailer: The seller may require the buyer to agree to pay cash immediately and to waive any rights to repair the trailer or to make demands on the seller if costs of repairs are higher than the buyer believes they should be. The buyer should be careful to reserve their rights to make such demands for a period after they inspect the trailer.
Damage to the Interior or Exterior of the Trailer: The buyer should agree to protect the trailer from damage once it is in the buyer’s custody. The seller may want the buyer to agree to indemnify the seller for any such damage caused by the buyer.
Indemnity: The seller may want an indemnity from the buyer, requiring the buyer to indemnify the seller for all claims against the seller arising out of the ownership, use or operation of the trailer after the sale closes.
No Encumbrances/Good Title: The seller may require the buyer to buy a trailer free and clear of all liens and encumbrances. In addition, the seller may require the buyer to represent to the seller that the buyer has good title to the trailer.
Liens and Other Legal Issues: The seller may want the buyer to agree to resolve any liens or other legal issues affecting the trailer before closing.
Frequently Asked Questions about Trailers Sale Agreements
Frequently Asked Questions about Trailer Sale Agreements
How long does a trailer sale agreement last?
A trailer sale agreement is typically effective for the term of the horse race. The agreement may require additional renewals and extensions, including on an annual or quarterly basis, to ensure continued compliance with the regulations of the governing body. It is important to be mindful that lapsing a trailer sale agreement requires you to re-apply for a license with the governing body upon the execution of a new trailer sale agreement.
Can I get into a trailer sale agreement with someone who isn’t licensed with the governing body?
Yes. Obtaining a license with the governing body is not a requirement to enter into a trailer sale agreement. However, trailer sales agreements are subject to the governing body’s approval. If the governing body has the authority to grant or deny such approvals, it may require that a trailer sale agreement be with a licensed entity. In South Carolina, the South Carolina Equine Advisory Committee has the authority to grant or deny approval of trailer sale agreements .
Does a trailer sale agreement remain in effect during an appeal to the governing body to overturn the governing body’s original denial of a trailer sale agreement?
Generally, a trailer sale agreement is effective upon its execution and, unless it is expressly stated otherwise, remains in effect until cancelled or terminated. However, you should keep in mind that a trailer sale agreement’s applicability and effectiveness is always subject to the governing body’s approval. It is also noteworthy that many jurisdictions impose a sale restrictions or no sale restrictions period that follows the cancellation or termination of a trailer sale agreement. It is important to confirm the applicable sale restriction or no sale restrictions period with the governing body when entering into a trailer sale agreement.
What happens if the trailer sale agreement becomes invalid or against regulations of the jurisdiction?
Many jurisdictions require at the time of effective date that the trailer sale agreement is reviewed by the racing commission or its representative to ensure compliance with the jurisdiction’s rules and regulations. As a result, in the event that a trailer sale agreement becomes invalid or contrary to the jurisdiction’s rules and regulations, the jurisdiction may withhold the trailer sales proceeds from a race until a valid trailer sale agreement is executed.