Is This A Contract?

[xRHETTx]

Write down a contract next time! I thought this was common knowledge?

Just something simple like "The seller agrees to sell the car for x dollars on condition of a favourable mechanics report etc etc"...

And both of you sign it.

There is even a sample sale contract you can download from racv or nrma etc etc, thats what i did, includes a condition report.

[predator]

as above.. verbal agreement doesn't really mean much at the end of the day, as it can be challenged easily.

It's really the sellers right to change their mind unless a deposit is put down for an agreed price if you ask me. From the sellers perspective as well, whilst they may not be legally obliged, they should be morally obliged to return the inspection cost if they simply decided not to sell the car (for whatever reason).

Common sense, says, write on a bit of paper "I agree to buy xxx for the value of xxx ... pending satisfactory inspection of vehicle. Signed <this date> seller: <signature> buyer <signature>". Give each person a copy. No problems. Holds more weight in a legal situation if it ever arises.

If you are the buyer obviously you don't write specifics into "satisfactory inspection" if you are the seller, then obviously you try and narrow that down so you don't get screwed... as what is "satisfactory" to one may not be to another. I'd put "barring problems with major mechanical items such as gearbox, engine or chasis" or some such.

[cowie165]

1) Parties Involved (buyer + seller)

2) An Offer (in this case sale of the car)

3) Terms (payment; times etc.)

4) Termination of Contract (what happens when either party fails to carry out their part)

Pretty close Stan, but there legal proofs for a contact are:

1) Intent to create legal relations

2) Agreement

3) Consideration

4) Legal capacity to contract

5) Genuine consent

Termination of the contract is included in the agreement. Legal capacity means you can't contract with a minor, person in a coma, mental disability etc. Genuine consent deals with contracting under duress.

I think I have also read somewhere that a verbal agreement is just as binding as a written agreement.

Yep, that's true however as everyone has said it's a pain to prove. There are some contracts that are required to be in writing, however buying a car is not one of them.

Also, a deposit is merely to indicate that you have an "interest" in the item/s. This does not reserve you full rights to the purchase - someone else could come along and pay the entire amount, voiding your deposit (which should be returned).

Azzurra said this is untrue... not quite as it actually depends upon the terms detailed in the contract. You don't actually need a deposit. If you both sign a contract whereby both parties agreed to sale of the car for $20,000, then that's all there is to it. As one of the other guys mentioned, if they sold the car you were looking at, they have broken the contract and are liable for the penalties contained therein (and may be forced by the court to provide a similar vehicle to carry out the sale). A deposit is more a sign of good faith - paying someone a deposit doesn't entitle you to anything - it is the contract that stipulates your entitlement.

Important note; if you give someone a deposit on a car (or anything for that matter), should make it very clear as to whether or not it is refundable if you decide not to go ahead.

Great advice. Buyers should have a contract sorted out before they go. Don't ask the seller to write 'a receipt' as that doesn't help you in the slightest when things go wrong.

Common sense, says, write on a bit of paper "I agree to buy xxx for the value of xxx ... pending satisfactory inspection of vehicle. Signed <this date> seller: <signature> buyer <signature>". Give each person a copy. No problems. Holds more weight in a legal situation if it ever arises.

That's a good start Gordo but more detail makes for a better contract. Everyone has seen LA Law or whatever and heard 'they have an airtight contract'. An airtight contract is one that doesn't allow for interpretation. For example, I could be the buyer above, and have agreed to buy [car] for [agreed price] however it should also state when final payment is due. It should also state that any deposit paid is fully refundable at any time prior to settlement. As far as 'pending satisfactory [mechanical] inspection' (awesome clause to include) goes, as you've said Gordo, it should be loose enough so that the seller does not have a say in what is 'satisfactory'. If they don't agree to it, move on. Think about real estate - if the seller and buyer cant agree on a contract, they both look elsewhere. Remember buying a $20,000 R33 will put you in debt for a lot of years and it is VERY important to purchase wisely. A good contract will protect you in the event you are being sold a lemon.

It is worthwhile to include a clause detailing penalties for termination. "Should [the seller] fail to make good on the provision of [car] at the agreed time of sale, a penalty of $500 shall be paid to [the buyer] within five working days." or something like that. That is the way you protect yourself from the seller finding another buyer - it is in their best interest to sell the car to you. If they find a buyer that will pay >$500 over your price, then they break the contract, become liable for the penalty, and you have $500 to spend next weekend.

I understand this is a saga of a post, but i thought I'd jot a few points down because I hate seeing young (I know you're not young Gordo ) dudes being screwed over.

Mark

[sigsputnik]

what cowie said!

[Space Goat]

if the bloke is just being stubborn and difficult id make him pay it my own way... how much does it cost to replace car windows these days ha ha??? an old spark plug usually does the job without too much noise

Edited June 23, 2006 by Space Goat

[readyGO]

I think it's probably an idea to find out what constitutes as a "contract"... from my understanding and studies, there must be the following:

1) Parties Involved (buyer + seller)

2) An Offer (in this case sale of the car)

3) Terms (payment; times etc.)

4) Termination of Contract (what happens when either party fails to carry out their part)

I think I have also read somewhere that a verbal agreement is just as binding as a written agreement. As mentioned, this is one word against another in court so not much to grasp. However, if your friend can prove he got the car inspected on the "reliance" that the contract would continue to the end, then there is a case. This shows that he was acting in ways to fulfil his part of the contract (purchasing the car).

Also, a deposit is merely to indicate that you have an "interest" in the item/s. This does not reserve you full rights to the purchase - someone else could come along and pay the entire amount, voiding your deposit (which should be returned).

Important note; if you give someone a deposit on a car (or anything for that matter), should make it very clear as to whether or not it is refundable if you decide not to go ahead. Many times people (me included) have been caught out for stuff such as ticket bookings etc.

Just some thoughts, don't hold any of it against me if it's wrong - just going by some knowledge and common sense.

actually the offer is... the guy Offering to buy the car, The agreed value that the guy said he would sell the price does not necessarilly make it the amount he will sell it for.

You- How much will sell it for?

Him- $15000

You- I agree to the $15000 as requested by you

HE HAS NOT FORMED CONTRACT WITH YOU, MERELY SUPPLYING YOU WITH INFORMATION.

what you have done though is said youd by it on inspection of a mechanic at the agreed price. Right?

Which is a condition precedent.. and although it was only verbally done, a verbal contract is legally binding. now, you have gone through with your part of the deal which he has accepted, (assuming he accepted the condition precedent) which means he is binded to the verbal contract of the sale of car at the agreed price..

hope that helps..

[sigsputnik]

woah charlie, not quite.

it depends on how the condition precedent was formed and worded. given the case, i'm afraid we don't have enough information on whether the condition was presented as a condition of contract, or a precedent. if the OP wants the car, he should argue that it was a condition. it would be in the seller's interest to argue that it was a precedent.

that said, yes you are correct that the invitation to treat doesn't confer a binding contract, but at the same time we can't say that a contract existed merely because of a given precedent (or even set of precedents). we simply don't have enough information about the process of events, nor the intention to create relations.

on a personal note, while many say that a verbal contract "is not worth the paper on which it's written", i always use such verbal agreements as a litmus test of the other party's intention and integrity. some weeks ago i found a suitable gtr - after lengthy discussion i agreed to buy the car, and the seller agreed to sell it to me. when i called back the next day to finalise bank cheque details, he said he'd already sold it. i saw this as an indicator of how he handled his transactions: if he was prepared to be fluid about the sale, what else (perhaps about the car itself) was he prepared to fudge?

[cowie165]

...i saw this as an indicator of how he handled his transactions: if he was prepared to be fluid about the sale, what else (perhaps about the car itself) was he prepared to fudge?

Wow, great example of being "a man of your word". That is a great point. He offered every assurance then turned around and dishonoured your agreement.

...genuine km's...