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Avidyne warranty indemnity clause

What I don’t understand is the calculation which led Avidyne to do this, knowing it will be a huge own-goal in the PR department.

The Q is not just whether 3rd party litigation (typ. by the estates of passengers) is really such a big factor. The real Q is whether an indemnity by the (in the usual case) the pilot/owner of the airplane is worth anything, or is worth enough in this context.

I mean, if I have a guy with a 10 year old van and a rag (and that’s all he has) wash my plane, and I make him sign a contract with €10M liquidated damages if he scratches my windows, how much cash will I really be able to extract from him? Maybe a few k. He prob90 lives in a council house and spends all his spare cash on beer and fags.

From an average IFD540-equipped airplane owner, maybe €1M-5M – the value of his house plus a few bits, plus insurance, on average. Beyond that, his estate will go bankrupt. It isn’t going to get me (Avidyne) very far…

How much is the average American private pilot worth? In the UK, the average house is about GBP 300k. The USA has on the whole lower property values (there is a lot more land). So I don’t see the average pilot worth say $20M.

Administrator
Shoreham EGKA, United Kingdom

Frankly, this looks like the attempt to rid themselfs of the American product liability laws which has driven up prices all over GA.

I have large doubts however that any US judge would honour this in the case of cases, as it basically tries to circumnavigate law which is deemed quite sacrosanct in the US. If this were to carry, we could expect all other producers of just about anything to follow suit.

LSZH(work) LSZF (GA base), Switzerland

I don’t think Avidyne are trying to avoid paying out on a personal injury case.

In the UK for sure, and I think in most civilised countries, one cannot have a contract which gets you out of a personal injury liability.

What they are seeking to get is to get you (the IFD540 owner, who took out this extended warranty) to pay for their costs if they get sued by a 3rd party. Typically this 3rd party would be your passengers in the crash or their estates, but it could be somebody on the ground. I reckon such a contract is enforceable. Let’s face it, you (as say a manufacturer of something) can get product liability insurance cover and the insurer is contractually bound to pay out on that, so a contract to reimburse somebody in this scenario was has to be feasible.

Obviously the way this is supposed to work is that the mfg (Avidyne) is supposed to take care of this liability by purchasing their own insurance, and build the cost into the price of the product. That is what everybody else in the business does. It doesn’t increase prices much otherwise the insurance premiums would feature massively in the published accounts of the avionics companies (but they don’t).

For some weird reason Avidyne dropped this indemnity into an extended warranty contract. It’s a strange place to put it and I can only imagine it is an attempt to entrap people who don’t read the small print (i.e. just about everybody). Or it could be that they have no confidence in their product not killing somebody after the 12 months have gone by! They have just posted a pretty hard hitting defence of this tactic so they are sticking to their guns.

Administrator
Shoreham EGKA, United Kingdom

What they are seeking to get is to get you (the IFD540 owner, who took out this extended warranty) to pay for their costs if they get sued by a 3rd party.

I didn’t see that part, or i probably wouldn’t have signed :-) But in general I think I am better off with + months of warranty. I am not interested in sueing anybody anyway.

Note that Avidyne is NOT released from claims if their product is deemed to be a probable cause of the accident. As such the owner is not subject to the obligation of covering their costs.

With regards to European law, in Napoleonic Law countries there is no such thing as tort or special damages.

What does that mean? No tort means no personal injury liability, no?

Also “probable cause” is a bit tricky, isn’t it?

Administrator
Shoreham EGKA, United Kingdom

Tort in the US sense means anything the jury deems appropriate eg sentimental distress – 20 million. Under European jurisprudence liabilities are limited to the missed earnings in case of injury or death, and very little if anything for moral distress (eg. what your insurance already covers). I have somewhere the jurispridence on a Swiss fighter jet crashing into an orchard and killing someone that illustrates that quite appropriately, I’ll see if I can find it.

Probable cause in a non-FDR equipped aircraft is tricky to ascertain but at least there is a provision for it.

Pity. I thought highly of Avidyne and their products. However with an attitude towards the customer like that, they will stay out of my aircraft. No matter that I could avoid this by not taking out the extended warranty but out of principle.

We don´t know how the whole thing works until the first case has been tried.

LSZH(work) LSZF (GA base), Switzerland

The way I see this is that it applies in the following case:

- you kill a passenger with an airplane with Avidyne avionics
- the widow of your passenger sues Avidyne in the US for $20m because the color of the knob on the IFD was the wrong shade of gray and contributed to the accident
- Avidyne pays $20m to the widow
- Avidyne sues you for compensation in the amount of $20m plus legal fees. Chances are very high you don’t have that amount of money so it’s not of great value to Avidyne. Maybe it helps most in the case where it’s your own widow that wants to turn your own stupidity into a nice pile of cash.

As a European customer this wouldn’t bother me much because I don’t think this scenario would be possible here. They could be no damage to Avidyne that would be eligible for an indemnification. Still it’s very poor ethics to burry such crap in the terms of sale.

I agree with your drift, Achim, and Avidyne’s defenders in the USA have been saying that the purpose of this clause is to prevent frivolous lawsuits against Avidyne.

Of course the extent of “frivolous” will pivot on the determination of “probable cause”. Let’s say you have terrain warning in the IFD and you flew into terrain. OK, we all know that it was pilot error but…?

Taking smaller figures, let’s say the passenger’s widow sues for €2M and your widow is worth €2.2M. Your widow is going to be even less happy than she was before

No matter how you look at it, this clause has the potential to wipe out you or your estate, by creating liabilities which exceed what you have. And AFAIK you cannot deal with it by increasing your insurance cover because you cannot insure against something on which you entered into a contractual liability.

Only accidental liabilities can be insured, AIUI. If e.g. you and I sign a contract whereby if you fly into my house and kill me, you pay Justine €10M, and then you accidentally fly into my house and kill me, your insurance isn’t going to cover the €10M agreed damages. But, I am not a lawyer (as you can tell).

One UK lawyer told me this morning he doesn’t think this clause would hold up in Europe, because it is a consumer contract. But I don’t think it is a consumer contract if the plane is owned by a company (as many private planes are, especially syndicates). Isn’t this how Diamond were able to separate out the DA40/42 engine warranty (go after Thielert, Sir, we sold you only the airframe) from the aircraft sold to FTOs? Under a consumer contract that would be obviously impossible but with a commercial contract almost anything is possible provided there is a two-way bargain.

I still intend to install 2 × IFD540 but only when all known bugs are fixed, when the product has been out there for a year or two, and then I will not go for the extended warranty. I would not get the extended warranty anyway if I buy it for a self install i.e. for an experimental aircraft located in Mongolia because there won’t be a dealer paper trail

Administrator
Shoreham EGKA, United Kingdom
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