Car Deposit

MidlandsM

Hi,

I got a pal of mine who had a classic car for sale recently. A person responded to the Ad, showed up, inspected the car and agreed a price and offered half of the full agreed price as a deposit by cheque, which my pal lodged to his bank. No issue thus far.

Then a week or 2 later the person came to collect the car, but stated they had changed their mind and wanted their deposit back. My pal declined to give it back as he was severly discommoded.

They have been "conversing" via mail since, he's threatening to take my pal to court for the deposit?

so, who is in the right? by law?

Thanks

Hogzy

Unless there is an express document detailing the terms of the agreement then the purchaser is entitled to his money back. Your "Pal" has not provided any consideration for the agreement. ie the purcahser has paid half the value of the car and has received nothing in return.

Milk & Honey

Hogzy wrote: »

Unless there is an express document detailing the terms of the agreement then the purchaser is entitled to his money back. Your "Pal" has not provided any consideration for the agreement. ie the purcahser has paid half the value of the car and has received nothing in return.

The "pal" has provided consideration. He has provided the car in return for the full sum. There is a concluded contract. He has retained the car for the benefit of the purchaser. The purchaser has defaulted on the agreement. The owner of the car is entitled to damages.

Shifty

My initial concern was 'has the cheque actually cleared yet'.

I would be concerned refunding the amount and then the original cheque bounces.

Just because the funds show in the account, doesn't necessarily mean the cheque has cleared.

I'd advise your pal to check the cheque has fully cleared before giving a refund especially if the cheque was non euro currency as these cheques take longer to clear.

Hogzy

Milk & Honey wrote: »

Hogzy wrote: »

Unless there is an express document detailing the terms of the agreement then the purchaser is entitled to his money back. Your "Pal" has not provided any consideration for the agreement. ie the purcahser has paid half the value of the car and has received nothing in return.

The "pal" has provided consideration. He has provided the car in return for the full sum. There is a concluded contract. He has retained the car for the benefit of the purchaser. The purchaser has defaulted on the agreement. The owner of the car is entitled to damages.

Yes damages. But that is totally different to what the OP asked. OP is asking if the vendor can seek specific performance of the sale. The purchaser has neither legal title to the car or possession. The purchaser has provided consideration and All he has received from the vendor is a promise to be sold the car. A promise is not consideration to bind someone to a contract. Consideration must pass from vendor if the vendor seeks to enforce. All the vendor might be entitled to are nominal damages for time wasting

Edit: thinking over. Promises can be consideration. It's too late to think about it. I'll come back tomo

Procrastastudy

This smells suspiciously like a homework question :P

Deposits don't count as consideration for the promise as they are part of the consideration for the item.

I'll also look this up from my contract 101 notes tomorrow. Cheers OP for the revision session! :P

Is holding on to the deposit really worth the hassle though?

Milk & Honey

Hogzy wrote: »

Yes damages. But that is totally different to what the OP asked. OP is asking if the vendor can seek specific performance of the sale. The purchaser has neither legal title to the car or possession. The purchaser has provided consideration and All he has received from the vendor is a promise to be sold the car. A promise is not consideration to bind someone to a contract. Consideration must pass from vendor if the vendor seeks to enforce. All the vendor might be entitled to are nominal damages for time wasting

Edit: thinking over. Promises can be consideration. It's too late to think about it. I'll come back tomo

The car was sold when the agreement was made. The promise is to deliver the car when the balance of the money is handed over.

MidlandsM

Thanks for the posts so far.

This is actually a genine scenario, and it genuinley is a pal of mine and the deposit was for a good few thousand, thats why its a HOT one!

Joey the lips

The buyer is not entitled to the money back. Its detailed in the consumer credit act. Additionaly the seller is entitled to sue for the remaining amount and a contract was made once the deposit was accepted.

But that same token had the seller sold the car to someone else the buyer would have been entitled to sue for breach of contract.

Its all in contract law and the consumer credit act.

Hogzy

If i were the "Pal", I would return the deposit but claim for expenses from the guy who is pulling out. If the vendor had to take a morning off work and had to drive somewhere to meet the purchaser then I would deduct that from what is to be returned. Obviously pre approve this with the purchaser.

I have no doubt that if this were to go to Court, the court would take a similar approach.

OP. What excuse has the purchaser provided for not going ahead with the transaction?

MidlandsM

Hogzy wrote: »

If i were the "Pal", I would return the deposit but claim for expenses from the guy who is pulling out. If the vendor had to take a morning off work and had to drive somewhere to meet the purchaser then I would deduct that from what is to be returned. Obviously pre approve this with the purchaser.

I have no doubt that if this were to go to Court, the court would take a similar approach.

OP. What excuse has the purchaser provided for not going ahead with the transaction?

thats the thing, he gave no valid reason........and was a real PRICK about it, so my mate was/is really pissed off and kept the full deposit, and i think rightly so.

Pkiernan

Keep the deposit.
Let the dirtbag "buyer" sue for it's return.

If the car sells in the mean time, then return the deposit less reasonable expenses incurred (costs of readvertising etc.).

Del2005

Shifty wrote: »

My initial concern was 'has the cheque actually cleared yet'.

I would be concerned refunding the amount and then the original cheque bounces.

Just because the funds show in the account, doesn't necessarily mean the cheque has cleared.

I'd advise your pal to check the cheque has fully cleared before giving a refund especially if the cheque was non euro currency as these cheques take longer to clear.

this is the reason why he shouldn't give the money back for longer than 2 weeks. He needs to confirm with his bank that the money has cleared from the issuing bank before he even considers handing over any money. The chances are any money handed over will be purely the sellers and none of the "buyers".

MidlandsM wrote: »

thats the thing, he gave no valid reason........and was a real PRICK about it, so my mate was/is really pissed off and kept the full deposit, and i think rightly so.