Deposit Taken, Legalities.

[Istartfires]

Hey guys, so on Monday my partner and I took a deposit for our car, with the agreement that he would get the car today with cash.

Now he seems to be going sideways and I'm not sure if he will be buying the car. We just signed a loan for our new car so if he says he don't want it no more we are in a shat.

He is the father of a friend so we thought it was all going to be sweet.

Any ideas?

[Trev]

If you have nothing in writing then there is nothing legal you can do about it and there is also what is known as a cooling off period, I had one guy change his mind after a week and that was after I had spent the money he gave me so I told him that he will get his money back when I sell the car.

[ke70dave]

No don't give any money back. Deposit is there so you.don't sell it. If he changes his mind he forfeits the deposit.

[Budowski]

yeh keep the cash for being messed around, its one thing to be interested in a car and its another to drop a deposit on one.

[LukeAE71]

Keep the deposit.

 

A deposit is paid to secure the car from sale to another potential buyer, which means you then tell others who enquired that the car is under deposit. You then lose potential sale so really the deposit is compensation should the person change their mind.

 

I have never paid a deposit for a car without the expectation that I would lose it should I not proceed.

 

As for cooling off periods... a private sale does not have any of that so its buyer beware.

[ke11restorer]

I echo what LukeAE71 has said.

[Istartfires]

Thanks guys apparently he is still buying the car so I'll see what happens I guess.

It sucks because we had got all happy because we were gonna get our stagea tomorrow but now it's gonna be next week, unless I find 8k I forgot about.

[Trev]

Well, this is from the mouth/hands of a lawyer that did a write up about selling cars privately:

 

In the vast majority of cases, a verbal agreement is just as binding as a written agreement. Of course should a dispute arise, the content of a verbal agreement can be rather difficult to establish and often the parties have different recollections of the events that took place.

 

The buyer has a duty to pay for the vehicle in accordance with the conditions of the agreement, if the agreement was that the car would be picked up and the balance paid 'tomorrow' and 5 days have passed, the buyer has breached this condition of the contract and generally speaking, the seller has the right to dispose of the vehicle elsewhere.

 

It is always prudent to allow a little extra time in case exceptional circumstances exist which contributed to the buyer not being able to complete the sale in the agreed time frame, but it sounds as though you have already allowed additional time.

 

On the basis of the information provided, you are able to sell the vehicle to another party. If the buyer subsequently surfaces and objects to you have sold the vehicle from 'under him', it is possible that you may be asked to appear before a tribunal or court but as long as you can demonstrate that the buyer did not comply with the conditions of the contract, the matter will be found in your favour. The worst case scenario is if the matter is found in the buyers favour (and assuming the vehicle is not very rare or 'one of a kind') you may be required to compensate the buyer for expenses incurred (travel costs, legal fees and so on). It is extremely rare for an order to be made that the seller must fulfill their contractual obligations as initially agreed upon.

 

In regards to the deposit, in contrast to a contract with a motor dealer (where generally they may only keep $100 of any deposit [during the cooling off period]), there is no legislated maximum amount of any deposit paid that you may keep in the event that the buyer 'bails out'. Unless (in this case) verbally agreed upon (and even if it is a condition of the contract it may not be binding), you have no 'right' to retain the deposit. Again if a dispute arises, you may be ordered to return the deposit in it's entirety (unlikely) or you may be compensated for costs incurred by you (re-advertising fees and so on). In rare cases, if the market value significantly declines during this period, the buyer may be ordered to compensate you, 'pay the difference' so to speak.

 

While this certainly doesn't constitute legal advice, if i were in your shoes i'd have no qualms about selling the vehicle. You have indicated you will refund the deposit which avoids a potential complication, i'd be very surprised if the buyer subsequently objected to you selling the vehicle to someone else.

Edited January 27, 2011 by Trev

[LukeAE71]

Thanks for that Trev, certainly an eye opener.

 

Let's face it though the majority of people buying privately are not going to go engaging a solicitor over their deposit. The legal fees would be more than the deposit is in most cases so they would just move on :happy:

 

When I take a deposit I always advise that it is non refundable regardless of circumstance :wink:

 

I also advise people if they do not put down a deposit the car remains for sale to the first person with a deposit. When selling my Chaser the guy refused to place a deposit so I sold it to another dude the following day for an extra $1000!! No deposit = car still available :dance: The original dude was not impressed :hmm:

[carbonboy]

I also advise people if they do not put down a deposit the car remains for sale to the first person with a deposit. When selling my Chaser the guy refused to place a deposit so I sold it to another dude the following day for an extra $1000!! No deposit = car still available :dance: The original dude was not impressed :hmm:

 

Boo diddly hoo, too bad for him. If he wanted it bad enough he would've put a deposit on it. People who don't put deposits down are usually tyre-kickers/dreamers anyway.