The Boat Purchase Agreement: What Every Clause Does in a California Sale

A boat purchase and sale agreement is the written offer that becomes a contract once the seller signs it. It names the boat, the price and the deposit. It also lists the conditions the sale depends on, such as a survey and a sea trial, and the dates by which each step must happen.

It is not the same thing as a bill of sale. The agreement is a promise to buy and sell later, on stated terms. The bill of sale is the document that actually transfers ownership on closing day. You sign the agreement at the start of the deal and the bill of sale at the very end.

Most used boats between 35 and 70 feet change hands through a broker on a printed form. That form matters more than any handshake at the dock. If a point is not written into it, you should assume it is not part of the deal.

Brokerage forms differ in wording, but almost all of them cover the same ground in the same order. The sections below follow that order. If you want the whole process from first sea trial to keys, our walkthrough of sea trial to closing covers the calendar. This page stays on the contract itself.

The buyer fills in the price, the deposit and the dates, then signs. That signed form is the offer. The seller can accept it as written, reject it, or change terms and send it back. Any change, even a small one to the closing date, turns it into a counter-offer that the buyer must now accept or answer.

Offers usually carry an expiry time. If the seller does not sign by then, the offer lapses on its own. Until the other side signs, either party can generally walk away, so keep each round of changes in writing and initial every edit. A deal can stall for days over who agreed to which version.

The deposit gives the seller a reason to take the boat off the market while you inspect it. Ten percent of the price is the industry habit, not a legal rule. A maritime attorney writing in The Log explains that no law requires a 10 percent deposit, and that whether you get it back depends mostly on the contract wording.

Where the money sits matters as much as how much it is. California law tells a licensed yacht broker to place buyer funds in a neutral escrow as soon as possible, or else in a trust account at a bank. The broker must hold the money there until it is paid out under the depositor’s written instructions. That rule is in Harbors and Navigation Code section 714, which also requires a separate record of every dollar received.

In plain terms, your deposit should never be wired straight to the seller. Check that the agreement names the account that will hold it. Then confirm the wiring details by phone with a person you know before sending anything.

This is the clause that protects the buyer. It makes the sale depend on a marine survey and a sea trial that you are satisfied with. The buyer chooses and pays the surveyor, and usually pays for the short haul-out the surveyor needs. If you have not watched one before, see what happens in a marine survey so you know what the report will and will not tell you.

The clause comes with a deadline. Many forms give the buyer a set number of days to finish inspections and decide. Before you sign, check that the window is long enough to book a surveyor and a haul-out slot. In busy months that can take longer than people expect. It also helps to budget early by checking what a yacht survey costs for a boat of your length.

Acceptance is the moment you give up your right to walk away freely. After the survey and sea trial, you sign a written acceptance, a rejection, or a conditional acceptance that lists repairs or a price change. The Log column notes that under the California Yacht Brokers Association form, a boat is treated as rejected unless the buyer signs a final acceptance before a stated date. Other forms work the opposite way, where silence can count as acceptance.

That difference is why you should read this clause twice. Find out what happens if the deadline passes and you have said nothing. Then put the date on your calendar the day you sign the offer.

In this clause the seller promises to deliver the boat free of liens and loans, with clear title. A lien is a legal claim on the boat by a lender, a boatyard or anyone else owed money. If one is still on the record at closing, it can follow the boat to you.

How title is proven depends on the boat. Larger boats owned by U.S. citizens are often documented with the U.S. Coast Guard, which keeps a federal record of owners and recorded mortgages. Smaller boats are titled and registered with the California Department of Motor Vehicles instead. The agreement should say which applies and who handles the transfer paperwork.

When the seller still has a loan, the payoff normally happens out of the sale money at closing. Our guide to lien payoff and escrow timing explains how that is sequenced so the buyer gets a clean release.

This clause sets the closing date, the place of delivery and what goes with the boat. The last part causes more arguments than the price. Electronics, the dinghy and outboard, spare parts, cushions and canvas all need to be named on an inventory list attached to the agreement.

If something is not on the list, assume it may leave with the seller. Walk the boat with the list in hand before you sign. It also pays to record the engine and generator hours in the contract, so you can check them again at handover.

Few surveys come back clean. Most list findings, from safety items to cosmetic wear. The survey clause is what lets you use that list. Templates rarely explain how, so here is the usual path.

First, sort the findings. Safety and structural items, such as a failing through-hull fitting or wet core in the deck, carry real weight. Cosmetic items and normal wear on a boat this age usually do not. Sellers know the difference, and an offer that treats every line as a price cut tends to stall.

Next, put a cost on the serious items. A written quote from a yard is much stronger than a guess. Then choose a remedy: the seller repairs before closing, the price drops by the quoted amount, or money is held back at closing for the repair.

Whatever you agree, write it into the conditional acceptance or a signed addendum. A verbal promise to fix something before closing is hard to enforce. Sign and send it inside the acceptance window, even if talks are still going on.

Free boat purchase agreement templates are easy to find, and some are fine for a small boat between friends. For a larger boat they tend to leave gaps. Many come from other states or other countries. They often skip the acceptance mechanics, say nothing about who holds the deposit, and have no inventory schedule.

Broker forms used in California are built around the steps above. They name the escrow or trust account, set the survey and acceptance dates, and say what happens to the deposit at each stage. The Log column makes the same point: many non-standard forms do not explain when a buyer’s deposit is at risk.

Private sales skip the broker, but the risks stay. Our look at buying from a private seller covers where those deals tend to go wrong. If you are on the other side of the table, the same agreement looks different from the dock, and you can read about how Jim helps owners sell your boat in the South Bay.

On a typical brokerage deal for a mid-size boat, this runs about six to eight weeks. Financing and Coast Guard paperwork can stretch it. The dates in your own agreement are the ones that count.