Can a car buyer back out of a verbal contract?
I've recently sold my car as a private seller to an individual who agreed verbally to purchase the car for a given amount (which he then gave me in the form of a cheque) in "as is " condition. I provided the buyer with a bill of sale which he accepted. He has not yet taken possession of the car and is now calling me trying to bargain for a lower price (based on the notion that there are some specific repairs that he wants done to the vehicle) and threatening to cancel the cheque. Can he legally cancel the cheque given that we have entered into a verbal contract for sale of the vehicle and that I have since turned down other offers for the vehcile? There were witnesses present at the sale of the vehicle.
Answers:
A contract for the sale of goods can be made:
1. In writing
2. Verbally
3. By conduct
If there is a written agreement then this is easier to prove if a disagreement between the parties arises.
You do not need, unless certain contracts require it -e.g. sale of land a contract to be in writing to be legally valid. After all when you make a purchase in your local supermarket how many people have to sign to buy things? It is usually done verbally.
Contracts for the sale of goods in the UK are governed by the “Sale of Goods Act 1996”. If a seller sells in the capacity of a private individual the implied terms of “quality and fitness for purpose” (s14) are excluded from the contract and “caveat emptor” (buyer beware) comes into affect. Therefore, if I buy a car from an individual seller only to find the lights don’t work or the gearbox needs replacing there is nothing I can do. I have bought it “as seen” and the law states that a reasonable should be done before making the purchase. The matter is completely different if I buy from a merchant and s14 cannot be excluded from the contract.
Therefore the words “as is”, “sold as seen” etc. are superfluous if selling as a private individual. The law states that they are already sold without the statutory protection afforded a buyer in s14 SGA 1996.
If the buyer has been given, as stated, a bill of sale then the contract you have made is not verbal. A contract has been made in writing between the parties. Even if neither party have signed they are still bound by it.
English law makes it clear concerning the validity of contracts and that is the terms of the contract must be strictly complied with. Therefore when he made the contract to buy the car from you there was a contract. It is no good for him now trying to get out of the contract. He agreed the purchase of he car at the stated price - he is contractually bound. Trying to impose conditions post-contractually is of no effect.
If he cancels the cheque he may be sued for the cost of the vehicle, damages and any other costs that flow reasonably from breach of contract. You have an excellent case in that you have the following:
1. Witnesses
2. Bill of Sale
3. Cheque
The fact a cheque has been made payable to you is evidence of the contract itself. After all who pays a cheque to someone without some kind of understanding or consensus between the parties? You don’t write cheques to people for nothing!
It is nonsense to say there is a so-called “cooling off” period between a private seller and a buyer. This relates only to sales between a business and consumer.
A word of warning! You state that you have had other offers to sell the car. Because the goods have become what is known as “ascertained” the buyer, despite his attitude, probably has title to the goods. If you then sell the goods to a third party you will be in breach of contract with them because under S12 of the Sale of Goods Act 1996 there is an implied term in a contract that when a seller sells goods they will have “good title”
and the goods will be free of any encumbrances or charges placed upon them. This means the third party can sue you for breach of s12 (because you no longer have title) and the original buyer can then bring an action against the third party recovery/damages - usually in the tort of conversion or trespass to goods.
I hope this lots helps and good luck with your case!
he has paid for the car at agreed price but still has same cooling off period as new buyer would have
if he cancels his cheque i dont think there is anything you can do just resell the car but not at a lower price to him his contract is already agreed as is the price to him
did either of you sign the bill of sale? and did the bill of sale have the price of the car, or "as is" condition written on it?
If the V5/Log book is in your name, its your car. I wouldnt sell to him at a lower price personally, but then Im stubborn! Either sell him the car at the price you agreed or sell it elsewhere.
did it state on the bill of sale that the deal was an "as is" sale?
did he sign the bill of sale? , did you get a copy of the bill of sale with his signature on it?
either way though i'd give him back his money and resell the car
why turn this into a big issue?
verbal contracts are non-binding and dont mean a thing in a court of law.even with your witnesses
B.
In law a verbal contract IS binding and I doubt in a private sale that there is any "cooling off period". The difficulty is that how can the parties really establish what was said.
The fact that a cheque was give might establish the price but what of the other "conditions" - how could anyone establish what they were.
Would it really be worth suing unless the amounts were huge?
As someone said [possibly Goldwyn] "A verbal contract isn't worth the paper it's written on"
if he really wants to back out of the deal and if you haven't cashed the check, I'd let him walk. Too many hassles.
A verbal contract is legally binding, however if he can cells the cheque and you are still the registered owner of the vehicle, and it is still in your posses ion, your only legal recourse would be to take legal action, involving (Dependant on the amount) small claims court, or a higher court with solicitors etc.
My opinion, tell him to bugger off, tear up the cheque yourself and re advertise the car,,,, next time take a cash non refundable deposit
I agree entirely with 'vipguy' and the only thing I'd add is this. Take the cheque to your bank immediately and ask for special clearance. I'll cost you a fee but depending upon the amount involved you may find it worthwhile. You don't have to tell the purchaser what you intend. If the cheque clears then tell him to come and collect HIS car.
Technically even if the cheque didn't clear there is an argument for saying the car is still his and what you have is a debt which you can sue him for, unless of course you can show he didn't have any funds and then you are into the realms of him possibly obtaining property by deception etc. but I really wouldn't worry about this - present the cheque and see what happens.
If the cheque 'bounces' or has been stopped then you could sue if you really want to but I expect by the fact that you are still in possession of the car there was a 'condition' ( even if you didn't realise that you had created a legal condition ) in your contract to the effect that he could have the car once his cheque cleared. If it doesn't then take a pragmatic view of the situation in the knowledge that on what you have outlined the law is on your side
Edit 1: I'm sorry but to all of you who persist in saying a verbal agreement can not amount to a contract, you are WRONG. We all make contracts day in and day out when we agree to buy and sell everything from a newspaper, a loaf of bread. get the car serviced etc etc. The basis of a contract is, simplified, a mutual exchange, the 'consideration' or value that one party gets and gives to another. The term 'value' or 'consideration' doesn't mean that it necessarily has to be a good value, in the sense of price, we all decide what we are prepared to buy and sell at, the law isn't intended to protect or allow a person to walk away from a deal on the basis that with hindsight one could have struck a better deal elsewhere, it is the intention to make an agreement, or more strictly the clear identification of an 'offer' and 'acceptance' that the law considers and will enforce. The only contract that the law requires to be evidenced in writing is one relating to the sale of land which is why house sales frequently fall though at the last minute. You will see time and time again on the house sale boards, 'under negotiation' or 'sold subjet to contract'. Often at the last minute, due to some hic cup, the vendors and sellers can not exchange contracts and the whole chain collapses. Off course it is easier to prove the existence and terms of a contract when they are in writing but the absence of writing does not mean there was no contract in existence.
Put simply: a verbal contract is not worth the paper it is printed on. In other words, there is no contract
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