Terms and Conditions for Machinery & Equipment Appraisal Report
1. Confidentiality and Use of Report: You acknowledge that the Machinery & Equipment Appraisal Report prepared by the Appraiser shall not be provided to any other party without the explicit approval of the Appraiser.
2. Scope of Appraisal and Reporting: The Appraiser will research the market and industry, apply appropriate approaches to value, and provide a written report detailing findings in accordance with the Uniform Standards of Professional Appraisal Practice.
3. Indemnification: You agree to indemnify and hold the Appraiser harmless against any losses, claims, damages, or liabilities arising from the use of the appraisal report, and understand that you will not hold the Appraiser liable for any negligence.
4. Limitation of Liability: In cases of negligence on the Appraiser's part, damages shall not exceed $5,000 or our fee, whichever is lesser.
5. Liability Limits: Our liability for any injury or loss arising from our services shall not exceed $5,000 or our fee, whichever is lesser. No punitive damages will be awarded. Increased liability limits can be negotiated with an additional fee.
6. Indemnification Obligation: Your obligation for indemnification extends to controlling persons of your business or entity, including directors, officers, employees, subcontractors, affiliates, or agents.
7. Testifying in Court: In case the Appraiser is required to testify in court or deposition regarding the report, you agree to compensate the Appraiser at the going hourly rate for professional time and expenses.
8. Defending the Report: Should the Appraiser be called to defend the report, expenses and hourly rates will be billed as a retainer, collected before work commences and replenished as needed.
9. Legal Costs: You will cover all legal costs incurred by the Appraiser in defending the appraisal.
10. Acknowledgment of Limiting Conditions: You acknowledge reviewing and accepting the Limiting Conditions as outlined in the report and Exhibit 1 and Exhibit 2 of this Engagement Letter.
11. Appraisal Methodology: Only larger machinery/equipment items will be appraised individually. Smaller support items will be valued using industry depreciation standards and historical metrics, reported collectively.
12. Dispute Resolution: In case of a dispute, parties agree to arbitration conducted in the appraiser's state of residence.
Delivery and Cancellation
13. Estimated Delivery Date: Estimated Delivery Date: The report will generally be delivered within approximately two weeks after receiving all necessary data or conducting an onsite inspection, if applicable. Please be aware that delays may arise if your availability for the machinery and equipment interview is limited or postponed. Our commitment to the estimated delivery date is subject to reasonable efforts, and we appreciate your cooperation in minimizing potential delays.
14. Cancellation: You have the right to cancel the engagement at any time, but cancellation will incur: (1) a 10% cancellation fee, (2) payment for work started, and (3) payment for unpaid invoices. See Exhibit 2 for additional cancellation terms and conditions.
Professional Standards and Confidentiality
15. Professional Opinion: The value conclusion in the report represents the Appraiser's unbiased professional opinion based on best efforts within reasonable time, conforming to the Uniform Standards of Professional Appraisal Practice.
16. Work Files and Confidentiality: All materials collected by the Appraiser during the engagement remain in exclusive possession. Confidentiality of the report, its content, and your identity will be maintained.
17. Confidentiality Exceptions: The Appraiser holds no liability for information disclosed due to legal or regulatory proceedings.
Disputes and Agreement
18. Legally Binding Agreement: This agreement is a legally binding contract between parties and applies to respective heirs, assigns, successors-in-interest, and legal representatives. It cannot be amended without written consent from both parties.
19. Understanding and Acceptance: You confirm understanding, acceptance, and agreement to be bound by the terms of this agreement after having read, considered, and received explanations for its terms.
20. Consent and Authorization: Your acceptance of this agreement indicates your consent and authorization for the Appraiser to proceed with the terms and conditions outlined.
EXHIBIT 1: STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
This analysis is subject to the following assumptions and limiting conditions:
- All facts and data set forth in this report are true and correct to the best of the appraiser's knowledge.
- The fee for this report is not contingent upon the values reported. There have been no guarantees associated with this fee and no liability can be intimated or assumed in any manner.
- Since this report has been purchased by the addressee, it is assumed by the appraiser that it is to be used by the addressee in determination of value at that point in time. Use of this report by others should be done so with the understanding that no risk or guarantees have been purchased by the owner of the report nor through the fee paid to the appraiser. The appraiser reserves the right to recall all copies of this report to correct any omission or error.
- Physical condition in most instances has been determined by observation or indication by others. Any unknown conditions existing at the time of inspection could alter the value. No responsibility is assumed for latent defects of any nature whatsoever which may affect value, nor for any expertise required to disclose such conditions.
- No consideration has been given to liens or encumbrances, which may be against the property.
- No investigation of legal fee or title to the property has been made and the claim to the property has been assumed to be valid.
- Neither the appraiser nor any officer or employee of the appraiser's company has any financial interest in the property appraised, unless specifically noted.
- No additional values or appraisals have been made in regard to such intangibles as patents, rights to manufacture, trademarks, goodwill, going concern value, etc.
- The report shall be prepared in conformity with the Principles of Good Practice and Code of Ethics of NEBB Institute.
- Other limitations, if any, are clearly defined and individually set out at that point related to the subject.
- Neither all nor any part of the contents of this report, or copy thereof, shall be reproduced for any purpose other than stated in the report, nor shall it be made available to the media, another appraiser or anyone else without the written consent of the appraiser.
- For all appraisals subject to satisfactory completion, repairs, or alterations, this report and value conclusions are contingent upon completion of the improvements in a workmanlike manner.
- Information, estimates, and opinions furnished the appraiser and contained in this report were obtained from sources considered reliable and believed to be true and correct; however, no responsibility for the accuracy of such items furnished to the appraiser can be assumed by the appraiser. No liability or responsibility is expressed for results from actions taken by anyone as a result of this report. Further, there is no accountability, obligation, or liability to any third party.
- Matters of legal nature or tax consequences have not necessarily been considered in this report. The reader should consult a competent attorney or CPA for information and opinions in those areas.
- In many instances, the appraiser is given information regarding machinery and equipment concerning repairs, accessories, condition, etc., which may or may not be verifiable by the appraiser for a variety of reasons. In such cases, the appraiser must rely on information provided to him/her in searching for comparative data. The appraiser disclaims any responsibility if given erroneous information by any party.
- Machinery and equipment appraisers are called on for price evaluation and verification for equipment from many different fields of business. It is impossible for any appraiser to be an authority in every field of machinery/equipment. Therefore, the appraiser has endeavored to use basic sound, accepted methodologies in any assignment (i.e., Cost New Less Depreciation and Market Data Approaches). Conversations with those dealing daily in a specific field are often conducted, and all final evaluations are founded on prudence and best effort on the part of the appraiser. "Conclusion of opinion of value" and/or "Estimate of value" is arrived at from years of experience in the sale and appraisal of machinery, equipment, businesses, and commercial properties. The final form of this report is made possible by omitting many details used in estimating, yet not considered essential to the report.
- The appraiser shall endeavor to use due diligence in all market comparisons. If possible, three comparisons of similar items sold usually provide substance for final value determination. However, at times it is not possible to find any direct sales comparisons that have actually sold. In these cases, the appraiser shall rely heavily on comments and testimony from sources considered reliable (dealers, auctioneers, manufacturers, wholesaler, etc.) in arriving at the final value estimate.
- The writer shall base his opinion on certain assumptions that have been presented to him. If these basic assumptions should change for any reason, the final valuation could quite likely change. The appraiser reserves the right to make any adjustments considered necessary as additional or more reliable data becomes available.
- If the request has been for the writer to accept values given by the principals, i.e., hard assets, fixtures, equipment, inventory, etc., then the assignment becomes hypothetical in nature unless the writer has specifically certified the values of such assets in the report.
- Nomenclature and identification of tangible assets are assumed by the writer to be accurate, but no guarantee is made in this regard.
- An appraisal is an estimate of value. When the amount is considered a reasonable and proper value under the concept of a definition, then it is applied. For this reason, the value is, in many cases, a rounded number. As stated in Engineering Valuation and Depreciation, a textbook published by Iowa State University Press of Ames, Iowa, "All values are of the nature of forecast of events and are subject to the uncertainties of all prophecies."
- In most cases, equipment is itemized, although certain areas require a group estimate, in which case the listings are shown in the quantity column as "lot." This is usually applied in nominal value areas that require general descriptions for applications elsewhere, or in areas where difficulty of access for total description would have required additional time not justified by the items being valued.
- It is assumed that all equipment has standard features commensurate with its normal operation. For instance, machine tools would include but not be limited to: belt guards, foot pedals, magnetic or standard starters, switch-gear, safety equipment, wiring, piping and controls, electrical, pneumatic or hydraulic systems, or other peripheral items considered standard for operating the indicated model or type of equipment. This type of detailed listing is not described for each machine due to repetition, time, cost, and description length within the listing. An attempt is made, however, to indicate any non-standard features at an appropriate point within the study.
- The valuation concept used in this report is one chosen by the client and should not be considered a recommendation by the appraiser as to what might result in any later application of the concept. Concept probability and/or feasibility are beyond the scope of the appraisal. The user of the report is to determine the probability of occurrence. The appraisal is purchased in order to allow an opinion of value under any assumed set of circumstances, as requested and mutually agreed upon by the client and the appraiser.
- Description of items made a part of this report is believed correct. Any errors or omissions were unintentional and should not affect the value assignment. Description is made with the attempt of allowing reasonable identification although it may not allow specific item identification in all cases unless company number tagging is utilized. Examples of this would be in such areas as cabinets, shelving, file cabinets, various hand tools, and non-serialized equipment or equipment without justification for serial number search due to associated value and/or time consideration. In some cases, identification numbers cannot be found.
- In some cases, an appraiser may indicate that certain equipment was observed in operation. This qualification is applicable only to specific pieces of equipment and should not be construed that other equipment was not operable or under operation at the time of inspection. This note could become extremely important in the future but is considered more of note "in passing" at the time of the on-site evaluation.
- The subject equipment may or may not conform to OSHA standards (Occupational Safety & Health Administration). The sole responsibility for conforming rests with the owner of the subject equipment and may not necessarily affect the final estimate of value reported herein.
- Any controversy arising out of or relating to this report shall be settled by arbitration in accordance with the rules, then in effect, of the American Arbitration Association. In the unlikely event that differences concerning our services or fees should arise, that are not resolved by mutual agreement, our liability for this engagement will be limited to a return of the fees we have received for this engagement.
- Since the conclusions by the appraiser are based upon judgments, isolation of any single element as the sole basis of comparison to the whole appraisal may be inaccurate.
- As stated, the provided document shall be a report estimating value based on "reported" condition. If it is the client's desire to verify physical condition and/or needed repair of the items, which are the subject of this report, the client should consult a qualified mechanic/technician. To determine actual mechanical condition is outside of the appraiser's expertise and the scope of this assignment. If the condition of the equipment is other than as reported to the appraiser, the estimated value could be unreliable. The appraiser reserves the right to change the value estimate if additional information comes forward as to condition or other factors, which could affect value. If an update is required due to additional information, then the Client agrees to pay for the appraiser's time to update the appraisal.
- Additional information may be necessary and will be requested by the Appraiser.
- It should be noted that the term "certified," or "certified appraisal" as used in this report refers to certification and testing from various recognized appraisal and consulting societies, organizations, or institutes.
- The report is not to be used for insurance purposes unless specifically stated to do so.
EXHIBIT 2: CANCELLATION AND REVISION OF APPRAISAL QUOTE
BizWorth reserves the right to cancel an appraisal, refund the payment, or provide a revised appraisal quote under the following circumstances:
- Change in Assumptions: BizWorth utilizes tools and methodologies to determine appraisal costs. In the event that the underlying assumptions, upon which the original quote was based, change significantly due to circumstances beyond our control or due to revised information provided by the client, we may need to revise the quote or cancel the appraisal.
- New Information: If additional, previously undisclosed information regarding the nature, condition, or other relevant details of the machinery or equipment subject to appraisal becomes available after the initial quote is provided, BizWorth reserves the right to revise the quote to accurately reflect the updated information.
Efforts to Ensure Accuracy:
BizWorth is committed to providing accurate and fair appraisal services. We will make every reasonable effort to maintain the integrity of our initial quotes. However, our commitment to accuracy may require adjustments in the event that the information or assumptions change. Such adjustments will be made promptly, and the client will be informed accordingly.
Cancellation and Refund:
If BizWorth determines that it is necessary to cancel the appraisal due to significant changes in assumptions or new information, the client shall be entitled to a refund of any payments made for the appraisal service. Refunds will be processed promptly and returned through the original payment method. It is important to note that in the event of such a cancellation, any costs or expenses incurred by BizWorth in the course of the appraisal process, including but not limited to travel expenses, research costs, and administrative expenses, shall be borne by the client and may be deducted from the refund amount. We will make every effort to minimize these costs and provide a detailed breakdown if applicable.
Should BizWorth decide to revise the appraisal quote based on changing assumptions or new information, the revised quote will be provided to the client for approval. The client may accept the revised quote, in which case the appraisal will proceed accordingly. If the client does not accept the revised quote, they may choose to cancel the appraisal, and any payments made will be refunded as outlined above.
By engaging BizWorth for appraisal services, the client acknowledges and accepts the possibility of appraisal cancellation, refund, or revision as described in this contract. BizWorth remains committed to delivering accurate and fair appraisal services and will work closely with the client to ensure transparency and satisfaction throughout the process.