An aircraft broker agreement is the contract that sets a broker’s authority, pay, and duties in an aircraft sale or purchase. The right review depends on who signs, what the aircraft is, and which state’s law applies to the deal.
Searchers looking for an aircraft broker agreement usually want to know which clauses to read before they sign, not a general pitch for counsel. Sellers, buyers, and brokers can use the same checklist. The answers still change with the facts. Aero Law Center focuses on aviation-specific legal matters and assists clients across the United States with federal aviation matters and aircraft transactions. Any state-law component is evaluated separately based on the facts, jurisdiction, and applicable professional-admission requirements.
What an Aircraft Broker Agreement Covers
A broker agreement is not the purchase contract. It is the engagement between a broker and a seller, or sometimes a buyer. It says what the broker may do, for how long, and when a fee is earned. The purchase agreement comes later, between the buyer and the seller.
Many listings look like a real estate listing. Aviation deals are different. Aircraft can move across states. Title and security interests may be recorded with the FAA. State sales and use tax can turn on where the aircraft is delivered. A form copied from another industry can miss those points.
Counsel may review the broker agreement and the purchase path together. The aircraft transaction work on a sale often includes the listing, the offer, inspection, escrow, and closing. Each document should match the others.
Start with five questions:
- Who is the client, and who signs for that party?
- Is the engagement exclusive, and for which aircraft?
- When does the commission become due?
- Who holds any deposit, and under what written instructions?
- What happens if the aircraft is withdrawn, damaged, or the deal fails?
Parties, Authority, and the Aircraft
The agreement should name the correct owner or buyer. For a company, the signer should have authority under the company’s own documents. A manager, officer, or trustee may need to show that authority. A broker who takes instructions from the wrong person can create a dispute later.
Identify the aircraft with more than a marketing name. Manufacturer, model, serial number, and registration number, when one exists, help tie the engagement to the right asset. Engines and expensive components sometimes have their own ownership or security history. Say whether they are included.
Authority should be specific. Marketing the aircraft is not the same as accepting an offer, signing a purchase agreement, or moving money. Some sellers want the broker to negotiate. Others want every offer brought back unsigned. The aircraft broker agreement should say which acts need written approval.
A power of attorney, if one is used at all, should be narrow. It might cover a defined closing step. It should not be a blank right to sell, lease, or encumber the aircraft. If no power of attorney is intended, the agreement can say that plainly.
Exclusive and Nonexclusive Scope
Exclusive means the client agrees not to hire another broker for that aircraft during the term. It can also mean the client will not sell around the broker. Nonexclusive means more than one broker may work, and a fee is usually tied to the broker who produces the buyer.
Read the geographic scope. Some forms say “worldwide.” That can be appropriate for a turbine aircraft with international interest. It can be broader than a piston listing needs. Also read whether the client may sell to a named party already in talks. A reserved-party list, if both sides want one, should name those parties and a deadline.
Co-broker arrangements need their own sentence. If another broker brings the buyer, the agreement should say who pays whom, and whether the total commission changes. Silence is a common source of fights at closing.
Buyers who hire a broker should look for conflicts. A broker can represent a seller on one aircraft and a buyer on another. The agreement can require written disclosure when the broker has a fee from more than one side, or an ownership interest in the aircraft.
Term, Termination, and Tail Commission
The term is how long the broker’s authority lasts. Fixed terms of several months are common. Some forms renew unless a party sends notice. Renewal language should say who may end the engagement, how notice is given, and when it takes effect.
A tail, sometimes called a protection period, keeps a commission alive after termination. A typical tail pays the broker if the client later sells to someone the broker introduced during the term. The window might be 90 days or longer. The trigger matters. “Introduced,” “negotiated with,” and “registered in writing” are not the same test.
Ask for a written list of prospects if a tail is included. Without a list, the parties may disagree about who was introduced. Also check whether the tail survives a withdrawal for maintenance, a failed inspection, or a sale to an affiliate of a prospect.
Early termination should address sunk costs. Some brokers ask to be repaid for specified advertising if the owner pulls the aircraft early. A cap, a receipt requirement, and a list of covered costs keep that clause from becoming a penalty argument. State law on early-termination fees can differ, so the clause should be read against the governing law named in the form.
Commission, Deposits, and Escrow
Commission is often a percentage of the price, or a flat fee. The base should be defined. Is it the contract price before inspection credits, the price actually paid, or a price that excludes tax? A credit for a discrepancy can change the fee if the base is not clear.
Say when the fee is earned and when it is paid. Earned at signing is different from earned at closing, and different again from earned when funds clear. If the buyer defaults, the agreement should say whether the broker shares any forfeited deposit, and in what share.
| Clause | Question to ask | Why it matters |
|---|---|---|
| Fee base | Price before credits, price paid, or a flat fee? | Inspection credits can shrink or inflate the commission. |
| Earned event | Signing, closing, or cleared funds? | A failed closing may still trigger a fee. |
| Tail | Which prospects, and for how many days? | A later sale to an introduced buyer can still be payable. |
| Deposit | Who holds it, and when is it released? | The broker should not be the only person who can move the money. |
| Failed deal | Is any forfeited deposit shared? | The share should be written, not assumed at the escrow table. |
Deposit language deserves its own paragraph. The agreement should name the escrow holder, the amount, and the written conditions for release or return. A broker’s operating account is a weak place for a buyer’s deposit unless an attorney has reviewed the safeguards and the parties still choose that path.
Escrow instructions should match the broker agreement and the purchase agreement. If one form says the deposit is refundable after a failed inspection, the other forms should not treat it as earned. Counsel can compare those sentences before anyone wires funds.
Marketing, Showings, and Inspection Access
The broker’s work should be described. Listing sites, a sign, photos, and calls to known buyers are different levels of effort. The agreement can state whether the owner must approve photos and asking price, and who may change the asking price.
Access language should protect the aircraft. It can require insurance, a named pilot or mechanic, and notice before a flight. A demonstration flight is not a license to reposition the aircraft for days. If a prospective buyer will fly, the agreement should say who must be aboard and who carries the hull and liability cover.
Pre-purchase inspection is usually a buyer-seller issue, but the listing sets the stage. The owner may promise reasonable access to the aircraft and records. The broker should not promise a clean logbook review the owner has not authorized. Damage during a showing or a test flight needs a responsibility sentence.
Marketing claims belong in the agreement as a duty to use only information the client supplies or approves. An overstated total time, a missing damage history, or a “no damage” line can become a misrepresentation claim. The broker and the client can agree on a correction process when a fact changes.
Registration, Recordation, and Dealer Limits
A broker agreement does not transfer title. Conveyances and many security instruments for U.S. civil aircraft are recorded with the FAA under 49 U.S.C. §§ 44107–44108. Until a recordable conveyance or security instrument is filed, its validity against third persons can be limited. Filing mechanics and FAA form rules still have to be checked for the specific aircraft.
A listing that promises “clear title” should not outrun the registry search, recorded releases, and any International Registry issues that apply to the aircraft or engines. Recording a security instrument still depends on the FAA’s current form, fee, and identification rules for that collateral.
Dealers’ Aircraft Registration Certificates are a narrow FAA tool. Under 14 CFR § 47.69, that certificate is valid only for defined uses tied to flight testing or flights necessary for sale, and only within the stated limits. It is not a general license to operate the aircraft for the new owner, and it does not replace an ordinary registration after a sale.
State and local rules sit beside the FAA rules. Some states treat aircraft dealers as tax registrants. In Florida, for example, dealer registration is part of sales and use tax administration, and a nonresident removal rule may or may not apply. The Florida Department of Revenue’s dealer and reseller guidance is a starting point, not a conclusion for every delivery location. Tax counsel or a CPA may need to confirm the delivery plan.
Private trade groups can be a diligence clue. Belonging to one is not a legal license, and it is not a substitute for reading the contract. The agreement itself should still state the broker’s role, insurance, and limits.
How the Broker Agreement Meets the Purchase Contract
The listing should not contradict the sale contract. If the owner reserves the right to reject any offer, the broker should not have accepted authority that skips that review. If the purchase agreement has an inspection contingency, the commission clause should not treat the fee as fully earned the day the offer is signed.
A short alignment check helps:
- Compare the aircraft description in the listing, the offer, and the draft purchase agreement.
- Match deposit, escrow holder, and refund triggers across all three.
- Confirm who may sign, and whether a power of attorney is actually required.
- Place title, lien, and International Registry work in the closing checklist, not only in the marketing copy.
- State whether the broker is a party to the purchase agreement or only to the engagement.
Purchase-agreement terms, such as acceptance, delivery condition, and risk of loss, belong in the sale contract. Aero Law Center’s note on how parties draft an aircraft purchase agreement is a separate review from the broker engagement. Buyers who want the buyer-side view of brokerage disputes can read what legal rights aircraft buyers have in brokerage agreements. Sellers comparing a direct sale can start with the aircraft sale discussion.
From aircraft transactions to aviation disputes and FAA compliance, Aero Law Center works with aviation businesses on the legal issues specific to their operations.
Disputes, Indemnity, and Governing Law
Many forms pick a state’s law and a court or arbitration forum. That choice does not decide every issue. 49 U.S.C. § 44108 ties the validity of certain recordable conveyances and security instruments to the law of the place of delivery, with important treaty limits. A forum clause in a broker agreement does not rewrite that statute.
Indemnity clauses often ask the client to protect the broker from claims about the aircraft’s condition or about facts the client failed to disclose. Read the carve-outs. A broker’s own misstatement, a flight the broker authorized, or a deposit the broker released against instructions may need a different allocation. Mutual indemnity is sometimes cleaner than a one-way clause.
Fee-shifting sentences that award attorneys’ fees to the prevailing party can deter weak claims. They can also raise the cost of a good-faith dispute. Insurance requirements belong next to indemnity. Ask which policy responds to marketing statements, and whether additional-insured status is required before a showing.
None of these clauses guarantees a result. They allocate risk if a deal stalls, a prospect later buys around the listing, or a buyer claims the aircraft was not as described. The facts of the introduction, the inspection, and the closing will still matter.
Questions Brokers and Clients Can Take to Counsel
Bring the draft, any side email that changes it, and the aircraft identity. A review is more useful before the aircraft is advertised. It can still help after signing, if a deposit, a tail, or a co-broker fee is already in dispute. Have questions about your situation? Contact Aero Law Center to schedule a consultation.
These questions cover the usual pressure points:
- Does the signer have authority for this owner?
- Is exclusivity limited to one aircraft and a defined term?
- How is the commission base calculated after credits and taxes?
- Who holds the deposit, and which document controls release?
- Does a tail require a written prospect list?
- Are demonstration flights and inspection access insured and limited?
- Do the listing and the purchase agreement use the same refund triggers?
- Which FAA filings, state tax rules, and lien searches does this aircraft actually need?
For a repair station or another aviation business that wants ongoing access to counsel, the AeroShield® Legal Plan is designed specifically for FAA Part 145 repair stations. If you operate an FBO, a Part 135 charter company, or another aviation business, contact Aero Law Center to ask whether AeroShield is available and appropriate for your organization. Eligibility, scope, and plan terms must be confirmed directly with Aero Law Center before enrollment.
Brokers who want a short overview of counsel’s role in a brokered deal, separate from this clause review, can visit the aircraft broker page. That page is not a substitute for reading the agreement in front of you.
Speak With an Aviation Attorney
Frequently Asked Questions
Is an aircraft broker agreement the same as a purchase agreement?
No. The broker agreement sets the broker’s authority, term, and fee. The purchase agreement is the contract between the buyer and the seller for the aircraft. The two should be consistent, especially on deposits, rejection rights, and inspection.
Does the FAA license aircraft brokers?
The FAA regulates aircraft registration, airworthiness, and operations. It does not issue a general occupational license that authorizes someone to broker aircraft sales. A Dealers’ Aircraft Registration Certificate, where one is used, is limited to specific flights connected to testing or sale. State tax or dealer rules may still apply.
When is a broker’s commission typically due?
Only the signed agreement can answer that. Some forms earn the fee at closing. Others earn it when a ready buyer signs, or if the owner later sells to a prospect the broker introduced. Read the earned-event sentence and any tail before you agree to the percentage.
Should the broker hold the buyer’s deposit?
Often, no. Many parties use a neutral escrow holder and written release instructions. If a broker will hold funds, the agreement should say where the money sits, who may release it, and what happens if the inspection fails or the seller cannot clear a lien.
Can a broker promise clear title in the listing?
A marketing sentence cannot clear a lien. Title work may include the FAA aircraft record, state, UCC, and tax-lien searches, and International Registry checks when those rules apply. The purchase agreement, not the listing slogan, should state what title the seller must deliver.
This article is provided by Aero Law Center for general informational and educational purposes only and does not constitute legal advice. The information provided may not reflect the most current legal or regulatory developments and should not be relied upon as a substitute for advice from a qualified attorney regarding your specific circumstances. Laws, regulations, FAA guidance, policies, and their application may vary depending on the facts and may change over time.
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