Car dealer refuses to refund £500 deposit...
Discussion
Funkycoldribena said:
And if a meteorite fell on his lot...anything else?
Forseeable Losses.Funkycoldribena said:
Maybe he now cant afford the lottery ticket that would have won 12 million....
Limit of remoteness.I've learnt stuff from this thread. Why not try reading it before jumping in?
silentbrown said:
I've learnt stuff from this thread. Why not try reading it before jumping in?
If you read the thread you would of seen I posted on page 5 exactly what was in the link I later provided.(If that makes sense).Not nonsense about the dealer suing for thousands in losses because the car depreciated 10k in a day...Funkycoldribena said:
If you read the thread you would of seen I posted on page 5 exactly what was in the link I later provided.(If that makes sense).Not nonsense about the dealer suing for thousands in losses because the car depreciated 10k in a day...
I've just read your link and unless I'm missing something it basically says tough s
t you've lost your deposit OP. Quote from your link below.Buying a car in person from a dealership
"A vehicle order signed on the dealer’s premises has no cooling-off period. Once you sign it, you are legally committed to everything shown on the form. Obviously you have consumer rights to return a car which is faulty and get a full refund, but you don’t have the legal right to simply change your mind either before or after taking delivery. You have signed a contract and you are expected to fulfill it. A dealer may be prepared to negotiate changes to the contract in order to keep you from walking away, but they do have the moral high ground here as it’s you who wants to change the contract."
oldnbold said:
Buying a car in person from a dealership
"A vehicle order signed on the dealer’s premises has no cooling-off period. Once you sign it, you are legally committed to everything shown on the form. Obviously you have consumer rights to return a car which is faulty and get a full refund, but you don’t have the legal right to simply change your mind either before or after taking delivery. You have signed a contract and you are expected to fulfill it. A dealer may be prepared to negotiate changes to the contract in order to keep you from walking away, but they do have the moral high ground here as it’s you who wants to change the contract."
Unless the contract is deemed unfair, which, as most are so one sided it is unreal, they quite probably are."A vehicle order signed on the dealer’s premises has no cooling-off period. Once you sign it, you are legally committed to everything shown on the form. Obviously you have consumer rights to return a car which is faulty and get a full refund, but you don’t have the legal right to simply change your mind either before or after taking delivery. You have signed a contract and you are expected to fulfill it. A dealer may be prepared to negotiate changes to the contract in order to keep you from walking away, but they do have the moral high ground here as it’s you who wants to change the contract."
PurpleMoonlight said:
Unless the contract is deemed unfair, which, as most are so one sided it is unreal, they quite probably are.
Sorry PurpleMoomlight I genuinly don't understand your comment. At the end of the day the dealer has the OP's £500 and unless the Op wants to take the matter legal I suspect that's how it will stay.
It would be good to get an update from the OP.
oldnbold said:
Funkycoldribena said:
If you read the thread you would of seen I posted on page 5 exactly what was in the link I later provided.(If that makes sense).Not nonsense about the dealer suing for thousands in losses because the car depreciated 10k in a day...
I've just read your link and unless I'm missing something it basically says tough st you've lost your deposit OP. Quote from your link below.Buying a car in person from a dealership
"A vehicle order signed on the dealer’s premises has no cooling-off period. Once you sign it, you are legally committed to everything shown on the form. Obviously you have consumer rights to return a car which is faulty and get a full refund, but you don’t have the legal right to simply change your mind either before or after taking delivery. You have signed a contract and you are expected to fulfill it. A dealer may be prepared to negotiate changes to the contract in order to keep you from walking away, but they do have the moral high ground here as it’s you who wants to change the contract."
mattmurdock said:
PurpleMoonlight said:
Sorry but the dealer cannot cherry pick parts of the law that suit them.
They can only claim losses for a breach of contract. If they don't want to go through the whole rigmarole of that and possibly having to prove the loss to a Judge, then they must return the deposit in full. They cannot retain the deposit as a penalty for the breach regardless of the loss.
So you strongly disagree with the linked article above?They can only claim losses for a breach of contract. If they don't want to go through the whole rigmarole of that and possibly having to prove the loss to a Judge, then they must return the deposit in full. They cannot retain the deposit as a penalty for the breach regardless of the loss.
If the contract contains a term which says the deposit is non-refundable, and the contract is for a sale and not for a service which has not yet happened (i.e. provision of wedding photos, catering etc.) then that term is binding unless there is good reasons for it not to be (i.e. breaches from the selling party).
In reality, the buyer would need to take the seller to court to prove otherwise (with the associated rigmarole you mention above). Unless the contract is extremely badly worded, it is likely the seller would win if they were taken to court. A non-refundable deposit clause is a standard business practice and a standard contractual term, so it would be difficult to argue that it was an onerous or unfair term for a consumer.
You seem to have a very strange view of contract law.
oldnbold said:
PurpleMoonlight said:
Unless the contract is deemed unfair, which, as most are so one sided it is unreal, they quite probably are.
Sorry PurpleMoomlight I genuinly don't understand your comment. At the end of the day the dealer has the OP's £500 and unless the Op wants to take the matter legal I suspect that's how it will stay.
It would be good to get an update from the OP.
Edited by johnfm on Wednesday 3rd June 22:22
johnfm said:
If the 'non-refundable deposit clause' was drafted as a liquidated damages clause, maybe £200/day to reflect a genuine pre-estimate of the seller's losses in re-marketing the car, such sums not to exceed the amount paid as a deposit then the seller would have a much better chance of retaining it.
Interestingly the form is the current revision on the Snows website. So either their lawyers are really lax, or they know something we don't...http://snowsautomotive.roi360.co.uk/Proofs/NON-SES...
johnfm said:
His view of the law is pretty good - as has been said countless times, the remedy for breach of contract is damages. As was pointed out on page 1 or 2, a 'non-refundable deposit' would be deemed a penalty and not enforceable. If the 'non-refundable deposit clause' was drafted as a liquidated damages clause, maybe £200/day to reflect a genuine pre-estimate of the seller's losses in re-marketing the car, such sums not to exceed the amount paid as a deposit then the seller would have a much better chance of retaining it.
I know I said I'd bow out of this debate but sorry johnfm, I don't agree and fear this thread is due to go even further off piste now you've said that. To my understanding, using Chitty as the main source of reference (which to those which don't know, is regarded as the most authoritative practitioner work on contract law):
1. The general rule is that where money is expressly paid as a deposit (as opposed to making payments by instalment), the deposit is regarded as security for the completion of a purchase and it will be assumed, even in the absence of a forfeiture of deposit clause in the contract, that it is intended to be forfeited in the event that the buyer defaults. (Howe v Smith (1884) 27 Ch D 89, 97-98 and Stockloser v Johnson [1954] 1 Q.B. 476, 490).
2. The contractual clause regarding forfeiture does not detract from that assumption, it adds to it.
3. Traditionally, English courts have not treated forfeiture of deposit clauses in the same way as clause which requires payment of a sum upon breach. I.e they are not subject to the penalty/liquidated damages rules.
4. So the starting point, then, is that the with the buyer clearly in repudiatory breach, the dealer is perfectly entitled to keep the deposit. If the buyer wished to recover it, it would be him who had the burden of showing he had a legal or equitable redress. It would not be down to the dealer to prove he had a right to keep it because, for example, the forfeiture clause was a genuine attempt to pre-estimate losses.
5. This doctrine has evolved relatively recently. For those who don't want to read any further though, I firmly do not believe the evolution would affect the outcome on these facts.
6. The Privy Council held (in Workers Trust Merchant Bank v Dojap Investments Ltd) that a deposit that was unusually large without any special reason (25% vs the customary 10%) was penal in nature and granted relief to the buyer in breach by ordering the return of the extra 15%. Note that the customary amount was retained by the seller. This case is of course not binding on English courts (and has received criticism, mainly because it did not apply the rules regarding penalty clauses in the usual way).
7. In any case, that was a contract for the sale of land, which is a different kettle of fish because s49(2) Law of Property Act 1925 grants courts an express legal authority to order return of deposit in certain circumstances, but ONLY for the sale of land (at the discretion of the court).
8. Even so, the Court of Appeal has approved the concept that money can be returned to a buyer in breach where it would be unconscionable for the seller to keep it in cases not involving land. It has equitable jurisdiction to make such an order. In the case that decided this though (Stockloser v Johnson), as mentioned in an earlier post the court, after approving the concept, declined to make such an order because it was not unconscionable to keep 43% of one contract price and 32% of another (although admittedly, the buyer had received benefit from the contracts already).
9. That notwithstanding, it's actually the dissenting view from that case that's been followed since, which is that there will be no order for the return of a deposit or payment by instalments subject to a forfeiture clause in the absence of fraud, sharp practice of unconscionable conduct on the part of the seller. (Galbraith v Mitchenall Estates Ltd [1965] 2 Q.B. 473.). In that case the seller kept over 50% of the price of a caravan on the basis of a forfeiture clause and the court decided that there was no reason to order any repayment, even though by the time the seller had re-sold it, he had more in his pocket than the original contract price.
10. Assuming the buyer was buying in a personal capacity, the Unfair Terms in Consumer Contracts Regulations may apply. This is not certain though (on account of the fact that even without the forfeiture clause, there would be an assumption that the seller could keep the deposit). Without lengthening this post further by giving detailed reasons, even if they did apply, I very much doubt that clause (that's standard practice in the trade) allowing a 1.85% deposit being retained on a flagrant breach would be considered unfair.
11. So, in summary:
i) the general position is that once a deposit is regarded a security for completion of the deal and once paid, if the buyer fails to complete the deal, it is forfeited and the seller can keep it without any need to show or prove anything. A forfeiture of deposit clause is not a penalty clause in the usual meaning.
ii) only relatively recently has any kind of redress become available for the buyer in default for a contract other than for the sale of land. If the OP did want to try to claim it back under the developing doctrine, it would be a tough job to succeed in any circumstances. And since here he's paid a grand total of a 1.85% deposit in a market where it's entirely normal for such deposits to be paid, he's got no chance. IMHO
iii) and if he does want to push it from a legal point of view, it's certainly going to cost a lot more than £500 in legal fees......
I hope that's this one put to bed, but imagine that there will be responses to this post with opinions that differ. I'd be (genuinely!) interested to hear any that have a legal basis. Gut feeling and simplistic application of general contractual principles don't count.
Edited by belly2002 on Thursday 4th June 09:32
Edited by belly2002 on Thursday 4th June 09:33
PS. Realise that reads like a law student's essay. Unavoidable I think, because this whole thread has got massively academic. A practitioner's view would, I'm certain, be 1) try to appeal to the dealer's better nature and 2) if that doesn't work, forget the whole thing. As I said in my first post, basically!
belly2002 said:
PS. Realise that reads like a law student's essay. Unavoidable I think, because this whole thread has got massively academic. A practitioner's view would, I'm certain, be 1) try to appeal to the dealer's better nature and 2) if that doesn't work, forget the whole thing. As I said in my first post, basically!
Going properly legal for £500 would obviously be absurd - you would try 1) then possibly try some of the bullst legal stuff in this thread and see if the dealer backs down.If they didn't, then for what it costs, it could be worth a MoneyClaimonLine punt - the decisions there can be pretty random and there's every chance you'd win be default. Although even then you've the issue of enforcing it.
Sheepshanks said:
you would try 1) then possibly try some of the bullst legal stuff in this thread and see if the dealer backs down.
.. and hope the dealer hasn't read this thread, then?t legal stuff in this thread and see if the dealer backs down.Sheepshanks said:
If they didn't, then for what it costs, it could be worth a MoneyClaimonLine punt
£35? I'd take it to the bookies instead. Better odds and more fun.MCOL works both ways, IIRC. Nothing to stop the dealer assessing a loss higher than the deposit, then filing an MCOL claim against the OP.
Bottom line is
He already went to CAB, they deal with this sort of thing every day
Their advice was not leave it, you've definitely lost it.
Their advice was not worry write a grovelling letter offering to pay them more money so they don't sue you for more than the deposit.
Their advice was to write to them asking them to justify their charges.
He already went to CAB, they deal with this sort of thing every day
Their advice was not leave it, you've definitely lost it.
Their advice was not worry write a grovelling letter offering to pay them more money so they don't sue you for more than the deposit.
Their advice was to write to them asking them to justify their charges.
belly2002 said:
ging84 said:
Bottom line is
He already went to CAB, they deal with this sort of thing every day
Ah, of course. I forgot the OP had already had advice from the ultimate legal authority. Don't know why anybody ever bothers employing solicitors and barristers.He already went to CAB, they deal with this sort of thing every day
belly2002 said:
ging84 said:
Bottom line is
He already went to CAB, they deal with this sort of thing every day
Ah, of course. I forgot the OP had already had advice from the ultimate legal authority. Don't know why anybody ever bothers employing solicitors and barristers.He already went to CAB, they deal with this sort of thing every day
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