New owner with big problem

jfdiii wrote:

Corporate lawyer friend confirmed this post as accurate:
"For a purchase contract to be binding, you need three things: OFFER, ACCEPTANCE AND CONSIDERATION. Seller OFFERS to sell you a vehicle at a certain price. You ACCEPT it. You exchange CONSIDERATION by paying for it.
Where you have a sticky situation is where the selling dealer denied acceptance of funds from the finance company/bank. This could be construed as denial of CONSIDERATION, and then you do not have a binding contract."

Hopefully it saved you from heading down a long road involving time, money and heartache. Bottom line, those three conditions have to be met for there to actually be a "deal". There is no "deal" until the money is in the bank. Deals go south all the time due to money -- usually the buyer cannot get the money to the table. In this case, it was an alleged typographical error in the paperwork, and that also happens from time to time.

If something of this nature goes to court (and as a dealer, I've been on both sides of this), the judge will look both at actual contract language as well as the good faith "intent" of the contract language. In this case, it sounds like it was a difference between $50,000 and $59,000 with the 9 right next to the 0 on a keyboard. Simple clerical error by the office secretary when she was entering the information. It happens. I personally think the dealer could have easily established good faith intent to have actually wanted to press the 9 when they actually pressed a 0.

I'm not sticking up for the dealer, but I don't feel any mal-intent was intended. The truth is that the selling dealer should have NEVER delivered the unit to you until all funds had exchanged hands. Had that occurred, this would have been a "done deal". Dealers are desperate to get as many transactions on the book as possible, so they take these risks. Most of the time the deals close. But every once in a while, something like this happens.

What I always do in cases where we deliver before funds have cleared is make the purchaser sign what we call a "one pay". That is a simple Retail Installment Contract that stipulates one payment of the entire amount. This way, if their funds fail to clear or their financing falls through, they are bound by the terms of the "one pay" contract they signed. If they do not make the single payment of the full amount due, then we have right of repossession. This keeps everybody honest and allows the dealership to deliver with a valid contract in force.