Can a Buyer back out of a car sale once deposit is paid?

H32k on 16/10/2017 - 18:50
Last edited 17/10/2017 - 17:48 by 1 other user

Hey guys, me again.

Just was told about a situation and wanted to get some opinions on the matter.

So the situation is that a very close friend of mine was selling a car which he bought only a few months ago from a guy who I have been told was a "shady character". Why he bought the car in the first place is anybodies guess.

Anyways so he had the car for sale and somebody came and put down a deposit and was all set to buy the car, my friend pointed out all the problems and was happy for the guy to inspect the car for as long as he wanted and he even apparently took it for a test drive. My point is that the guy seemed happy with it for the price.

So today, the guy called him saying that he found out the car had been previously written off as a repairable W/O and repaired then re-registered.

He asked me if he was obliged to let the guy cancel the deal or if he is within is rights to tell him the deal stays on as agreed. I'm no expert so yeah, fire away.

Looking forward to reading the comments

Automotive

Comments

  • PissLUR on 16/10/2017 - 18:56

    Yes but your friend can keep the deposit. The buyer didnt do his homework before the deposit

    • pegaxs on 18/10/2017 - 14:24

      Wrong. It depends on the size of the deposit and the amount of inconvenience the transaction has caused.

      Unless there was a written agreement as to the status of the deposit, then you can’t just keep it. If they want it back, just give it to them and move on. There is a chance they can take you to court to get their money back and that isn’t worth anyone’s time. On top of that, they know where you live and it’s not worth the security of the vehicle over some moron.

  • John Kimble on 16/10/2017 - 18:59
    +3

    Can a buyer back out of a car sale once deposit is paid?

    Yes

    He asked me if he was obliged to let the guy cancel the deal or if he is within is rights to tell him the deal stays on as agreed. I'm no expert so yeah, fire away.

    How does he intend to forcefully obtain the balance of the sale from the person who doesn't want to proceed?

    • mbck on 16/10/2017 - 19:03
      +2

      Bikes?

      • WreckTangle on 16/10/2017 - 21:02
        +2

        Cars

      • John Kimble on 16/10/2017 - 21:09
        +1

        These?

      • magic8ballgag on 17/10/2017 - 08:52
        +6

        If you're going to continue to beat a dead horse, at least spell it correctly.

    • H32k on 16/10/2017 - 19:15

      He said that the buyer and he had a written sort of "contract"

  • McBanjo on 16/10/2017 - 19:12
    +1

    Two separate contracts. First contract is the promise of not selling it to anyone else and taking it off the market, etc. 2nd contract is the sale of the car - of which there was no offer so there is no contract.

    Friend has likely suffered costs as a result of the sale falling through which is recuperated by the deposit. Your friend can't force anybody to buy the car, but as the sale did not go through, the deposit is forfeited. A good person would refund the deposit, less their costs.

    • H32k on 16/10/2017 - 19:14

      I see, ill pass that on

    • pegaxs on 18/10/2017 - 14:57

      Wrong, the deposit is not forfeited unless it was expressly stated in the contract of sale. You can withhold a reasonable amount in regards to any costs incurred for their messing about, but it isn’t the whole deposit. Unless the deposit was only $50.

  • [Deactivated] on 16/10/2017 - 19:15
    +7

    deposits forfeited, but ur close friend sounds a bit shady too by withholding it was a previous write off until he found out himself.

    • H32k on 16/10/2017 - 19:15

      He wasn't aware of it until the new buyer told him

      • WTF on 13/01/2018 - 00:17
        -1

        I highly doubt it. Why is your friend selling a car after just a few months?

        Lets get real. Your friend knows perfectly well about the issues with the car. The only shady person here is your friend.

        • H32k on 13/01/2018 - 01:30

          First of all way to bump a 3 month old post, second of all he didnt know at all and the guy ended up really wanting the car in the end and bought it for more

        • Slippery Fish on 13/01/2018 - 01:41

          @H32017: you told him there was a key of coke hidden in it somewhere lol

  • spackbace on 16/10/2017 - 19:16
    +14

    Save yourself the headache, refund the deposit.

    How hard is it for a seller to pay the $3.40 to show a clean REVS report? Or in this case, just to be upfront about the write-off status?

    Your 'friend' is shady if they're trying to sell a written-off car and not disclose it. They're just hoping people wont do the check.

    • H32k on 16/10/2017 - 19:26

      He wasnt aware of the history until the buyer told him

      • spackbace on 16/10/2017 - 19:28
        +6

        I've heard that one a few times…

        Where'd he buy the car from?

        • H32k on 16/10/2017 - 19:33

          pretty sure it was from gumtree or carsales

    • TheBilly on 16/10/2017 - 20:35
      +3

      Agreed, dodgy sales guy not buyer. Bought way too many cars, the amount of, "oh I had no idea is ridiculous". OP just return the money. Disclose history and move on.

      • John Kimble on 16/10/2017 - 20:58

        caveat emptor though

        • TheBilly on 16/10/2017 - 22:27
          +3

          Well yes. Buyer beware. Buyer did the necessary checks. Buyer now wants deposit back on the basis that the car is not as originally advertised due to discivery of new info. Buyer is considered shady. Seller is now looking to see if deposit can be withheld.

        • John Kimble on 17/10/2017 - 02:05
          -1

          @TheBilly: OP just states that the buyer wants to pull out of the sale. Didn't say they want the deposit back.

  • Cheeper on 16/10/2017 - 19:22
    +5

    Return the deposit and avoid hassle… your mate obviously did not disclose the known history of the car and it was relevant information.
    Before your mate sells again he should make up a list of all the known faults, including the previous write off history and also state that any deposit paid will be non refundable.
    Get the next buyer to sign it and your mate keep a copy.
    On his sale receipt it will not hurt to state clearly that the vehicle is sold as is and no warranty or guarantee is given or implied. Some people buy used cars privately and they think they are entitled to a lifetime warranty… :-(
    Cover your ass…

    • H32k on 16/10/2017 - 19:27
      -1

      Again my mate didnt know that it was a repairable write off until the buyer told him

      • Cheeper on 16/10/2017 - 19:35

        Sure… Just make sure he mentions everything possible if he gets another buyer.. in writing.

  • Findo on 16/10/2017 - 19:56
    +6

    Good luck to your mate, he may as well keep driving that car until it’s dead now. Who in their right mind would buy a previously written off car?

    • H32k on 16/10/2017 - 20:07

      My thoughts exactly

    • Presence on 17/10/2017 - 12:05
      +2

      Who in their right mind would buy a previously written off car?

      For the right price plenty of people would. Even if involved in a serious accident the value of parts could easily justify purchasing it.

      • Euphemistic on 17/10/2017 - 12:44
        +1

        Thats the sort of car you buy to run into the ground. Buy it knowing it was cheap to start with, but that you will have a hard time selling it at market value. The cheaper/older the car gets, the less it matters what happened in it's previous life.

        Also if it is an older car, the written off value might be simple parts replacement to get it back on the road eg bumpers, lights, guards doors with no structural damage.

        • Presence on 17/10/2017 - 12:51

          Also if it is an older car, the written off value might be simple parts replacement to get it back on the road eg bumpers, lights, guards doors with no structural damage.

          You make a very good point. Hail damaged cars are often written off, and sold at steep discounts.

        • Euphemistic on 17/10/2017 - 13:37

          @Presence: and yet they are perfectly good, safe, usable vehicles.

  • whooah1979 on 16/10/2017 - 21:00
    +2

    A full vehicle history disclosure isn't required in nsw for private sales. It is the buyer's responsibility to do their research before deciding to purchase and hand over a deposit.

    The nsw fair trading vid for buying a vehicle.
    https://youtu.be/pzkdMpywu7Q

    • spackbace on 17/10/2017 - 00:46

      Yeah nor is it required in WA, however if you're doing a private sale which involves people coming to your house, probably best to make sure it's all kosher…

  • PlasticSpaceman on 17/10/2017 - 07:56
    1. The buyer does not have to purchase the car, so your mate can't force him to
    2. Your mate can keep the deposit, but personally I think the decent thing to do would be to offer to return the deposit (so when he tries to sell it again he can be open about the history), but also come back with a revised sale price to the current buyer who may still be interested if the new price reflects the actual value of the car.
    • AlanJ on 17/10/2017 - 08:17

      Agree 100% with Plastic Spaceman. If he didn't know about the car's history, then the defaulting buyer has really done him a favour; he can approach the next buyer with a clear conscience (having made that price adjustment).

  • Ozpit on 17/10/2017 - 08:50

    Yes, I agree with the PlasticSpaceman. Return the deposit. Forget about what's legal. Put yourself in the potential buyer's shoes: if it were you, what would you want to happen? I always try to follow the golden rule… do unto others, etc. It's a pretty good maxim on how to live your life. You will always feel better for it.

  • IIGnomeII on 17/10/2017 - 09:05
    +1

    My view:
    Your friend is not a car dealership (from what I am reading) and there was no legal contract signed to say that he would forfeit the deposit or be liable for the rest of the money owed should the buyer back away.

    Best way forward - pay the money back, less the cost to put it back up on carsales or whatever site your friend listed it on.
    Doing otherwise is just dodgy in my opinion and you don't know what this buyer will do.

    • Euphemistic on 17/10/2017 - 09:52

      This. It's a private sale, there will be no written contract and no team of lawyers to fight the case.

      Give back the money and sell it to some other sucker.

  • smux on 17/10/2017 - 15:55

    This is why it's important to state the terms and conditions of the deposit to the buyer before accepting his deposit, so that everyone is clear on what the terms and conditions are, and no one can say "that's unfair". The problem here is that everyone's assumptions about the default conditions of a deposit will differ.

    If you state that the deposit is a non refundable deposit, then you're suggesting that it is a commitment to buy and the loss of deposit is a penalty for screwing the seller around.

    You could state that the deposit is refundable, minus the cost of any RWC.

    You can do what you want (within reason) as long as the buyer agrees to those terms.

    • Euphemistic on 17/10/2017 - 20:28

      In a private sale, a deposit is just a confirmation the buyer is going to come back. Its not a guarantee.

      • smux on 18/10/2017 - 00:12

        Is there a law saying you can't put the same conditions on a deposit that a dealer might? Eg a "holding" deposit or a "purchase" (non refundable) deposit (as described here. Because there are no regulations for private sale, I would've thought you can make up whatever conditions you want. Whether the conditions you make up would be upheld at a tribunal is another story though.

        • Euphemistic on 18/10/2017 - 09:44

          Sure, you can make up whatever conditions you want, but a private sale is typically a fairly relaxed event. Person shows up, decides they want your product and either hands over cash and takes it with them, or has to go to the bank to get some more cash and will pick it up then. Why complicate it?

          Sure, there are scammers out there, and plenty of time wasters, but in my experience selling stuff online the majority are easy to deal with and there is no need for 'contracts' and legal speak.

          In the case of the OP's situation, I suspect a dealer would have to hand back a deposit as the vehicle is 'not as described' wether it was non refundable or not.

  • cyrax83 on 18/10/2017 - 12:02
    +1

    Yes they can back out. Depending on how much of a fuss you want to make - it's up to you whether you refund the deposit or keep it.

    But not disclosing that it was a write off whether you knew or not is pretty significant - I would return the deposit unless it was specifically stated that the deposit was non refundable regardless of the condition or prior history of the car.

    • pegaxs on 18/10/2017 - 15:26
      +1

      It’s not up to them to keep the deposit. All the buyer has to do is take it to a magistrate and say that the write off status was not disclosed at time of agreeing to purchase and is this voids any contract and the seller will be up for the deposit AND the court costs.

      You are able to retain a fair amount that would cover reasonable costs. If deposit was $1000, it would be a huge job convincing a magistrate that you suffered losses to that amount…

      • cyrax83 on 18/10/2017 - 16:29

        Yeah I agree with you. The deposit should be returned in this case unless something was in writing.

  • imcold on 20/12/2017 - 18:56

    Did the seller check if the car was really written off? That way you will know how to price it. You can add it to the deposit refund fee.

    • H32k on 20/12/2017 - 19:02

      FYI the guy ended up really wanting the car and bought it lol

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