Obligation to investigate and provide information when buying and selling a boat

When buying and selling a boat or other vessel at sea, problems may arise with the vessel after it has been taken over. The question then becomes whether this is the responsibility of the buyer or the seller, and it can be difficult to reach an agreement between the parties. It may be crucial for the case whether the buyer has examined the boat both before and after the purchase, and whether the seller has complied with his duty of disclosure, or whether important information about the boat has been kept hidden from the buyer.

Our lawyers assist in a large number of cases involving the purchase and sale of boats, and are happy to help you if you need legal assistance. We assist both buyers and sellers in local and national cases, and can assist in negotiations and cases before the courts.

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Investigation prior to purchase

When buying a boat from a private individual, you should always examine the vessel before the purchase is completed. However, there is no obligation to inspect the vessel prior to purchase, and it is permitted to buy a boat sight unseen. However, it may be a good idea to carry out a thorough inspection of the vessel, its various parts and functions, as well as test drive the boat if the seller allows it. For example, you should examine the vessel for rust in the engine and machinery, look at technical functions, and take a look at the hull and bottom of the boat.

As a buyer, you cannot claim defects that you knew or should have known about at the time of purchase. If the buyer has examined the boat before the purchase, or has unreasonably failed to comply with the seller's request to examine it, the buyer cannot complain about defects that should have been discovered during the inspection or test drive. This applies unless the seller has acted with gross negligence or otherwise contrary to honesty and good faith.

Inspection after takeover

As a buyer, you have a duty to investigate when you take possession of the boat. You must, within reasonable limits, inspect the boat for faults or defects. This is important as the warranty period runs from when the fault or defect was or should have been discovered.

Duty of disclosure when selling a boat

The seller has a duty to disclose defects or deficiencies in the boat that the seller knows about or should know about. This also applies to hidden defects. This means that the seller must inform the buyer about significant aspects of the boat, and that what appears in the boat advertisement must be correct information. If the seller withholds information about the condition of the boat or other matters of material importance, the seller may be liable if faults or defects become apparent after the buyer has taken possession of the vessel.

Buying a boat with encumbrances?

When you're buying a boat, it's important to check whether the vessel has any encumbrances. If the boat you've bought has a mortgage, this means that the boat has been pledged as security for someone's claim. This means that you risk losing the boat if the mortgagee demands that the mortgage be realized. It's easy to find out if you're buying a boat with encumbrances. You can order a mortgage certificate from the Ship Register if the vessel is registered there, or from the Brønnøysund Register Office if the boat is only registered in the chattel register, to find any encumbrances.

The problem usually arises when buying a boat from a private seller. However, it also happens that used boats purchased from a dealer are subject to a lien. It is therefore important that the contract entered into between you and the seller contains a section on encumbrances, where it is expressly stated whether the boat is sold with or without encumbrances.

If the boat is encumbered and the seller defaults on the obligation for which he has pledged the boat as security, you will have a recourse claim against the seller. This means that you can demand that the seller compensates you for your financial loss, which corresponds to the value of the boat if you lose it. If the seller has not informed you that the boat has an encumbrance at the time of sale, there will be a defect in the purchase. It is then important to send a complaint to the seller as soon as the matter is discovered.

Boat insurance - legal aid coverage

In your boat insurance, you have legal aid cover for your legal expenses in the event of a dispute with the seller or buyer. The insurance company requires documentation of the dispute to cover legal assistance. When covered by the insurance, you as a customer normally only pay 20% of the legal fees and a deductible of between NOK 3,000 and 4,000.

Our assistance

Are you involved in a boat dispute and wondering what rights you have as a buyer or seller? Then our lawyers can assist you!

Contact us for a no-obligation consultation, and get assistance from a dedicated team of lawyers who have extensive experience in buying and selling boats.