Paid deposit and now they're cancelling the contract??

Grumpy_chap

amrose20 said:

Grumpy_chap said:

amrose20 said:

Hi guys, 
Went car shopping on Saturday, found one, paid a deposit of £500 and arranged to pay the balance on weds collect Thursday. 
Today I received a phone call to say that they had mis valued the car and that they could no longer sell for the agreed price and that it was actually 7K more than agreed. Where do we stand on this, as we have the the receipt for the original price? They have said that they will refund the deposit but that they are able to cancel the order. Would appreciate any help as its time sensitive.
Thanks,

A difference as much as £7k should be obvious - did you agree a "steal"?

No! They said that they could do it, at no point did they say it was a steal etc. We weren't expecting to buy that car, we were just test driving it and when we came back they said that they could do it within our budget

pinkshoes said:

amrose20 said:

Jenni_D said:

The devil is in the detail ... was the price astonishingly cheap for the car? If yes then they can likely claim it was a unilateral error which allows them to rescind the contract and put you back in the position as if the contract had never existed.

What make/model/year of car, and what was your purchase price?

We did think it was cheaper than average but they said they ran the numbers when we were on a test drive and when we came back and agreed on 25K they then said they would just check them again which they did and said yep can do it for 25K.

All I've found online says that the deposit is legally binding?

Seat Tarraco, 2021, 25K

If the £25k agreed was far too cheap then if it was clearly a mistake they are entitled to cancel.

Looking on Autotrader, the prices are £22,250 to £45,000 depending on spec and mileage.

OP - what exactly does any paperwork say that was swapped when the £500 deposit was paid?  That is going to be critical in establishing whether or not there was a contract comprising offer - acceptance - compensation.  Is the deposit simply to reserve the car or first payment on a full sale contract?

Then, the challenge of whether "unilateral mistake" gives the Dealer the opportunity to reverse the deal.  AIUI, "unilateral mistake" is an error by one party (Dealer) when the other party (customer) should have been aware it was obviously a mistake.

Now, I didn't even know what type of car a Seat Terraco model is until I looked online for this thread, so if I went to a Seat Dealer and they had half-a-dozen on the forecourt at £22k - £45k as PinkShoes suggests and I liked the one at £25k, I might not be aware of where that trim / engine choice sits in the range.  A £7k error may not be as obvious a mistake as might first appear to be the case.

cx6

user1977 said:

cx6 said:

However, once the OP offered the price and the garage agreed and money was paid then legal title of the car transfers to the OP at that point.

Why on earth would legal title transfer before the full price has been paid? You're barking up the wrong tree here.

because that is what contract law and sale of goods law says.

provided there are no contract terms that say otherwise, once a contract is formed, legal title passes from the seller to the buyer even before payment or delivery.

I have just done a quick google - see rule 1

https://www.legislation.gov.uk/ukpga/1979/54/part/III/crossheading/transfer-of-property-as-between-seller-and-buyer

Grumpy_chap

It is almost certain that the used car sales particulars have a clause about when title of goods transfers, and it is almost certain that will refer to when payment is made (to the Dealer, so payment may be by finance).

user1977

cx6 said:

user1977 said:

cx6 said:

However, once the OP offered the price and the garage agreed and money was paid then legal title of the car transfers to the OP at that point.

Why on earth would legal title transfer before the full price has been paid? You're barking up the wrong tree here.

because that is what contract law and sale of goods law says.

provided there are no contract terms that say otherwise, once a contract is formed, legal title passes from the seller to the buyer even before payment or delivery.

I have just done a quick google - see rule 1

https://www.legislation.gov.uk/ukpga/1979/54/part/III/crossheading/transfer-of-property-as-between-seller-and-buyer

Even if it isn't explicitly covered in the contract, "the property...is transferred to the buyer at such time as the parties to the contract intend it to be transferred." Do you think it plausible that a court would believe in this case the parties intended to transfer title before payment was made?

cx6

I will reproduce the section here so you can read it properly then i'm outta here. There was an offer, acceptance and indeed some money paid. Unless there was some specific term in the paperwork then a contract was created and the OP owns the car and indeed should insure it against loss damage etc

Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

18Rules for ascertaining intention.

Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.

Rule 1.

—Where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.

Ergates

Unlike with, say, a cooker or a TV, a there is a very specific process that takes place to transfer ownership of a car.

Penguin_

It depends what paperwork has been signed, if indeed any has been signed. The dealership I used to work in would take a deposit, give the customer a receipt for said deposit. We would then go to the sales admin with the details of the sale & once this had been done it would go to the sales manager for approval. Once that had been done we would contact the customer to come in & complete the necessary paperwork which would be signed & at that point the contract was entered into.

Undervalued

Ergates said:

Unlike with, say, a cooker or a TV, a there is a very specific process that takes place to transfer ownership of a car.

Is there?

I though it was the keeper of the vehicle who was registered with DVLA not the legal owner (which may or may not be one and the same person).

born_again

Last 3 cars we bought. 2 new 1 ex demo. Deposit taken, receipt for this. NO paperwork signed until balance paid at point of picking car up.

Either way. Dealer has upper hand. They have the car, returned deposit. Would OP be prepared to spend money to go to court on this & end up maybe a year down the line at court still wanting the car?

Manxman_in_exile

Ergates said:

Unlike with, say, a cooker or a TV, a there is a very specific process that takes place to transfer ownership of a car.

What is the specific process for transferring ownership of a new car?