Contract issues in the sale of commercial aircraft.

Abstract

The sale of large commercial aircraft is a highly competitive business, conducted between multibillion dollar corpora-ions. It is a highly visible industry and because of its size and the nature of the business, it is linked with economic growth. Aircraft sales are highly cyclical and influence! by a wide variety of factors The contract for the sale of aircraft and associated services is the vehicle which specifies the various elements of the agreement between buyer and seller and is used by both parties to allocate risk. This thesis identifies and examines the commercial contract process and the articles or clauses in the typical industry contract, the relationships between the functional contract organization and other functional elements of the firm, and various factors of uncertainty and risk inherent in the commercial aircraft industry. This work provides insights into the contract process as well as an appreciation of the uncertainty and the magnitude of the risk the U.S. aerospace manufacturer's commercial business activity.