Re: What should I do? (Ethical advice)
I think there are a few issues that are not being considered.
First, does your state require a title for a boat? If so and they didn't provide one, you can't do anything with the boat anyway.
Second, does your state require some other proof of ownership (previous registration, etc.) in order to register it in your name. Same thing - if so, and the school hasn't given you that, your stuck. In either of these cases, however, if they did give another document that legally transfers ownership to you, but it isn't sufficient to register the boat, you might have a cause against them. Is it worth it? I don't think so, but the issue is there.
As to ownership, if the paperwork that you do have is legally sufficient to transfer ownership to you, they have no right at all to ask for the boat to be returned. Whether you choose to do so or not, depends more on your desire to remain in a friendly relationship with them, than anything else.
If you do give it back, I would demand a release of liability, with indemnification. Now that the boat has been in your hands, and you have done "things" to it, if they take it back, but pass it to someone else rather than to scrap it, you end up with exposure. If someone were to get hurt in it, the same sort of lawyer mentality that has brought you to your current dilemma, could come back at you in other ways.
If you decide to keep the boat, my recommendation is that you do not provide them with any sort of release at all. At this point, you have no obligation to do so, and there isn't any advantage to you in providing one. Further, if you make any such suggestion, Mr. School Lawyer will send you about a ten page agreement that will nail you for everything and anything that they could possibly suffer. In particular, they will want you to indemnify them, meaning that you end up defending them as well as yourself, if something happens. Why think about this? Because they have a lot more money than you do, and anyone who gets hurt in your boat could hire an attorney, who will then look for deep pockets. Since that lawyer will press hard for a settlement from the school, you'll end up with some serious legal bills for the defense that they put up. Your free boat could end up costing you tens of thousands of dollars. Admittedly, I have taken the potential for problems to the extreme, but this is not out of the realm of possibilities.
If you don't wish to end up with unhappiness over a boat that really hasn't cost you much, I suggest that you simply take the it to an aluminum recycling facility. I have no idea what an aluminum boat would fetch, but if it is about 30 cents per pound and the boat weighs a couple of hundred pounds, you will walk away with 60 bucks. Afterwards, if you want to be a nice guy, you can call your original contact at the school and tell him that the boat has been destroyed.
Mr Lawyer will probably want an affidavit or something, but my inclination would be to say no. Once again, you have no obligation to talk to them at all. Simply tell them that you decided to remove the concerns that they had, and leave it at that.
PS: I just went back and read JBJ's comments. He and I are both from Louisiana, and would probably agree that the chances of registering that boat here, would be about nil. The La. Dept. of Wildlife & Fisheries is very tough in regard to boats without proper paperwork. You can't even register one as "homemade," unless you can show receipts for the materials used to make it!
