GOOD FAITH PURCHASE OF RECREATIONAL BOATS : A comparative study regarding the buyer’s investigation duty

Abstract Media has since a long time back been writing about extensive thievery of recreational boats and their engines. The value of the stolen goods is estimated to several hundreds of million Swedish crowns per year. The widespread stealing creates a secondary market where boats sometimes are sold by sellers that do not have the rights to sell the boat. This creates risk for the buyer who most often is a private person. A situation the buyer can face is that the boat was stolen and that the original owner can demand to get the boat or engine back. The original owner has the right to get the boat back independently of if the purchase was done in good faith or not. Another risk is that the buyer purchases a boat that stands as security for a loan, so called reservation of title, which is common for expensive recreational boats. If the boat is sold in such a situation the buyer stands the risk of being forced to return the boat or be forced to pay the remaining debt. It is possible to try to claim the damage from the seller however they are normally difficult to get hold of or do not have the ability to payback any money. It is complicated for private persons to understand what requirements that need to be fulfilled to make a good faith purchase of a recreational boat. A reliable register is also lacking for recreational boats, this in combination with the fact that guiding case law is limited creates a difficult situation. The objective of the essay is to clarify what is required to make a good faith purchase according to the law of “Godtrosförvärv av lösöre (1986:796, GFL)” and case law. The essay aims to be of practical use for the purchaser of a recreational boat to minimize the risks of the purchase. It contains a checklist with important bullet points and a standard contract to be used at the time of purchase. It also contains illustrations of how real and fake engine and chassi numbers can look like. The wronged buyer will also have practical use of the essay since it contains information about what legal actions the buyer can take if he ends up losing the recreational boat, both from a private person and a business owner. It is made clear in the essay that the change in the law that occurred 1999 regarding the demands to make a good faith purchase increased the demands on the buyer. This at least in theory puts the original owner in a better position. The question has not been thoroughly investigated since guiding court rulings regarding recreational boats, especially from Supreme Court of Sweden is lacking. Of the case law that does exist is it however clear that the investigation duty of the private buyer at the time of purchase is extensive. The fact that a reliable register is lacking could paradoxically point for and against the buyer being in good faith. A register had reduced the insecurity of the purchase since it would be possible to get information about the true owner. On the other hand it would be impossible to make a good faith purchase for those that did not check the register before the purchase. The essay discusses both advantages and disadvantages of compulsory registration of recreational boats. The essay also covers the consequences the change in the law in 2003 regarding the ability to make good faith purchases of stolen goods. Case law shows that the ability to acquire stolen property in good faith exists, but is heavily limited and court rulings regarding recreational boats are non-existing. The conclusion of the essay is that several factors determine if the buyer is in good faith or not. Several concrete and often occurring parameters including the price of the goods, the state of the goods and the sales situation are analyzed. All of the factors points towards the conclusion of highly limited possibilities to make good faith purchases of a recreational boat. The buyer should therefore take the investigation duty with great seriousness, take direction in the checklist provided and overall be skeptical and realistic in the purchasing situation. By doing so the risk of buying a boat that the seller does not have the right to sell is minimized