In the world of aircraft sales, nothing moves without a clear contract. Whether you’re working with an aircraft broker or bidding through an online auction, the agreement you sign is the foundation of the deal—and the roadmap for the escrow company.
This post breaks down the structural differences between brokerage contracts and auction agreements, and why getting the jurisdiction, language, and process right can make or break the sale.
Aircraft Brokerage Contracts: One Agreement, Two Parties
In a brokered aircraft sale, the buyer and seller negotiate directly and sign a single purchase agreement. That document outlines:
- Purchase price
- Deposit structure
- Contingencies
- Delivery terms
- Closing conditions
The broker facilitates communication, logbook review, aircraft access, and negotiation—but the contract comes directly from the buyer and seller. The escrow company follows the instructions in that single document.
Key points:
- One custom agreement governs the deal
- Broker manages negotiation and timelines
- Escrow company follows the signed purchase contract
- Governing law is usually the seller’s home state
Aircraft Auction Contracts: Two Agreements, One Transaction
Aircraft auctions work differently. Buyers and sellers don’t negotiate terms after the fact—the deal is pre-structured before bidding even begins.
- The seller signs a listing agreement with the auction company. This defines the reserve, timelines, inspection windows, delivery expectations, and legal terms.
- The buyer signs a participation agreement when registering to bid. If they win, this agreement becomes a binding purchase contract.
After the auction closes, the escrow company uses both documents—buyer’s and seller’s—to finalize the deal.
Key points:
- Two separate but pre-aligned contracts govern the deal
- Escrow follows the terms agreed to before the auction ends
- Buyer knows the terms upfront—no haggling after the win
- Governing law is typically the state where the auction company is based
The Role of Escrow—and the Importance of Jurisdiction
Escrow agents don’t mediate—they execute. Their job is to:
- Confirm documentation
- Hold and release funds
- Verify logbooks and titles
- Coordinate closing
- Execute exactly what the contracts say
That’s why it’s crucial that both auction and brokerage agreements have precise language and that the terms are enforceable in the proper legal jurisdiction.
- In brokered sales, the contract usually follows the law of the seller’s state.
- In auction sales, the platform sets jurisdiction—usually where the auction house is based.
This legal anchor determines how disputes are resolved, what rules apply, and how enforcement would proceed if something goes wrong.
Final Thoughts
Whether you’re selling through a traditional aircraft broker or listing your aircraft in an online auction, the contract is the heart of the transaction. It sets the rules for escrow, protects both sides, and defines the legal playing field.
If you’re signing a contract to buy or sell an aircraft—read the fine print. Know where the jurisdiction is, understand the timelines, and make sure the instructions are clear and consistent. A good contract makes closing easy. A bad one makes closing impossible.