[hlmiii]

The easiest way to approach and understand this ... reverse the positions.

Purchaser and Dealership have discussion(s) about the order/purchase of a car for which there is limited supply and a known waiting list. Purchaser ends up giving Dealership a sum of money for the purpose of securing a certain priority/place in line to purchase the car. Dealership takes the money and both parties then wait for the next step in the process.

When the time for finalizing the details of the order nears, the Purchaser seeks to resume discussion of the purchase with the Dealership. At that point the Dealership says that it is no longer interested in a sale to the Purchaser and returns the check.

How does the Purchaser react? He/she and everyone else in this thread is entitled to believe that the Purchaser should be able to obtain the vehicle and that the Dealership should be required to continue the original transaction as agreed. The exchange of the check for performance is an actionable promise.

A delivery of value from one side is an obligation due from the other side.

Here the OP wanted performance from the dealership and tendered a check to secure his goal. The dealership accepted the check. After that transaction the OP then entered into another agreement only because it was more attractive to him/her. OP is not entitled to have his original check refunded simply because it would work to his benefit.

The fact that either party voluntarily decides to release the other from performance does not mean that the underlying transaction was not actionable. It simply means that the party accepting the release has agreed to voluntarily waive the obligation(s) that are due him/her from the original agreement.


(yes, the above is from a practicing JD graduate )

[Epirali]

Originally Posted by hlmiii

The easiest way to approach and understand this ... reverse the positions.

Purchaser and Dealership have discussion(s) about the order/purchase of a car for which there is limited supply and a known waiting list. Purchaser ends up giving Dealership a sum of money for the purpose of securing a certain priority/place in line to purchase the car. Dealership takes the money and both parties then wait for the next step in the process.

When the time for finalizing the details of the order nears, the Purchaser seeks to resume discussion of the purchase with the Dealership. At that point the Dealership says that it is no longer interested in a sale to the Purchaser and returns the check.

How does the Purchaser react? He/she and everyone else in this thread is entitled to believe that the Purchaser should be able to obtain the vehicle and that the Dealership should be required to continue the original transaction as agreed. The exchange of the check for performance is an actionable promise.

A delivery of value from one side is an obligation due from the other side.

Here the OP wanted performance from the dealership and tendered a check to secure his goal. The dealership accepted the check. After that transaction the OP then entered into another agreement only because it was more attractive to him/her. OP is not entitled to have his original check refunded simply because it would work to his benefit.

The fact that either party voluntarily decides to release the other from performance does not mean that the underlying transaction was not actionable. It simply means that the party accepting the release has agreed to voluntarily waive the obligation(s) that are due him/her from the original agreement.


(yes, the above is from a practicing JD graduate )

Thanks for the detailed theory. But can I just add the following conditions/question:

1) What happens if the dealer can not deliver a car for say 5 years? Then what?

2) What if the dealer can not deliver the car EVER?

3) What if the dealer changes ANY condition of the original set of agreements upon delivery (sorry you ordered blue, it is white, tough).

BTW I am pretty sure dealers are not bound to deliver a car UNTIL you sign a sale order. I think a reservation is just that, a right for a position to BUY a car. Please correct me if I'm wrong.

Thanks.

[ddk632]

The great thing (depending on one's perspective) about attorneys is that they will argue whichever side hires them, with equally compelling arguments.

The discussion is moot without reference to the state in which the transaction occurred and knowledge of any laws in that state that pertain to this subject matter.

Anything else, even from attorneys, unless they are licensed to practice in the state in question and are familiar with that particular subset of law, amounts to varying degrees of speculation.

[YWGT3]

This whole process could have possibly been avoided if the depositor would have clarified IN WRITING, within the deposit statement or in a form of a written attachment (addendum) to the deposit statement, describing the intentions and expectations of both parties as it pertains to the deposit (i.e. deposit will be refundable up to a certain point of the transaction or fully refundable up until signing the sales and related contracts). This minimizes any dispute or misunderstandings if this case were to end up in court. If the dealership is reluctant to incorporate the aforementioned addendum to the deposit agreement, then Caveat Emptor (Buyer beware!). If it doesn't smell right, then there are plenty of other dealerships to go to. Case in point, I didn't like what I heard on the deposit and waitlist process from the initial BMW dealer I went to. Ended up placing a deposit with a second dealership, which deposit receipt included a WRITTEN AGREEMENT that stated the deposit is fully refundable if the vehicle in question does not meet the anticipated estimated time of delivery and if a sales contract for the vehicle has not been mutually executed by dealership and customer.

[hlmiii]

Hi, Epirali -

All of the conditions that you set out involve a failure of the Dealership to uphold its obligations of the agreement. So it is very different situation - that party has breached the agreement.

The Purchaser would be able to claim a failure to perform and recover his/her deposit check. The Purchaser would be able to seek compensation for loss suffered by the failure - higher costs, lost opportunity, replacement, etc.

Originally Posted by Epirali

BTW I am pretty sure dealers are not bound to deliver a car UNTIL you sign a sale order. I think a reservation is just that, a right for a position to BUY a car.

Possibly. But not necessarily. As above - a legal analysis can conclude that a dealership is legally obligated to make a car available to the customer once the deposit check is accepted.

The obligation to deliver a car or the car would be dependent upon what was discussed, understood, expected and acted upon before, during and after the delivery + acceptance of the check.

The sales/purchase order memorializes an agreement, in addition to setting out the exact details of the obligations. It is very possible that an actionable agreement can be found and upheld without the order.**


**Okay. For all of you legally-licensed and otherwise perceptive people out there, there are caveats and exceptions to all of the above. And I am well aware that most states require a written document for agreements involving real property.
Of course ... there are exceptions to that, also.

[hlmiii]

Originally Posted by ddk632

The great thing (depending on one's perspective) about attorneys is that they will argue whichever side hires them, with equally compelling arguments.

Somewhat true, in general. Which is a good situation.

Originally Posted by ddk632

The discussion is moot without reference to the state in which the transaction occurred and knowledge of any laws in that state that pertain to this subject matter.

To the extent that "moot" is meant as "having little or no meaning," the statement is not correct.

General principles and operation of contract law are very similar in all 50 states - and in most other countries. The issues that vary are the application of the general rules to more specific circumstances.

Originally Posted by ddk632

Anything else, even from attorneys, unless they are licensed to practice in the state in question and are familiar with that particular subset of law, amounts to varying degrees of speculation.

This is not true. Virtually all responsible attorneys are/should be able to run through fundamental issues and provide some guidance. Such overview is also possible from law students and paralegals - and even from those without such training who do have an interest or had sufficient exposure (ask any client ). Law isn't exclusive magic - at least at this level.

[ddk632]

I beg to differ.

This isn't really contract law. We're talking about deposits. There is no contract or sales order to speak of. This is specifically regarding state laws that govern auto dealerships and related transactions.

For example, in Florida, it is under consumer protection statutes, regulation of trade/commerce, etc.

My point was that the most qualified person to specifically speak to the issue at hand is an attorney practicing in the state in question, familiar with (in this case) consumer protection law (Chapter 501 of Florida statutes in my state, for example).

Moot, meaning pointless. As in, unlikely to produce a distinct resolution.

And, by varying degrees of speculation, here's an example at the extreme end. An attorney licensed to practice in Germany will know very little about even generic US laws. An attorney who is well versed in family law or consumer protection law in Florida is unlikely to be familiar with the nuances of the statues in another state, or the culture in the local court system which often can differ vastly even from county to county.

No one said anything about magic; it's all about familiarity with specific statutes and the local court system.

Certainly any attorney can provide some valuable generic insight, but that is not going to help the OP if he wants to figure out what rights he has in his state, and what are the likelyhood of winning a case in his jurisdiction.

Just my layman's thoughts. I probably don't know what I'm talking about, so if I am completely incorrect, it doesn't really bother me

My only experience is being really good at research and being fresh off of a 2 year divorce during which I learned more about my local family court than I honestly care to know.

[ddk632]

Anyway, I am hoping it can be resolved for the OP without resorting to any of that.

[hlmiii]

Originally Posted by ddk632

This isn't really contract law.

Respectfully - it is contract law. That is the category that underlies the rights, obligations and resolutions of transactions.

Originally Posted by ddk632

it is under consumer protection statutes, regulation of trade/commerce, etc.

Correct - these are all examples of contract law principles that have been enacted into a formal, state-sanctioned legal structure.

Originally Posted by ddk632

We're talking about deposits. There is no contract or sales order to speak of.

Yes, there is a "contract."

A contract does not have to be written to exist. In some instances it does not even have to be realized as such by either party at the time it arises - analysis and the legal process can and will infer a contract if it is appropriate.

Originally Posted by ddk632

An attorney licensed to practice in Germany will know very little about even generic US laws.

Not necessarily true. Not only are many basic principles very similar, but it is also the case that a good attorney can readily engage in his/her own research into the legal process of another country, at least to the point of having a grasp of the issues. It is not uncommon.

If you think about it .... business transactions of any kind could not easily and profitably occur without a general, common basis for operation. This is true between neighbors, cities, states and countries. Businesses would not be able to engage in commerce without some level of mutual assumption and understanding.

Your Florida example sets out more narrowed details, as I alluded to previously: "nuances" are the local distinguishing aspects of the general legal principles underlying every jurisdiction, which are best served at that level by someone who is "well versed."

Finally - "differ vastly even from county to county" may be a definitional issue. ALL courts in all Western jurisdictions have similar basic mechanisms. What differs are the ways in which those processes are carried through.

Originally Posted by ddk632

that is not going to help the OP if he wants to figure out what rights he has in his state

Well, I've already stated that I disagree. The basic concepts are common to all US states (even Louisiana ) and can provide some guidance.

Originally Posted by ddk632

2 year divorce during which I learned more about my local family court than I honestly care to know.

You have my condolences - personal as well as legal.

[hlmiii]

Originally Posted by ddk632

Anyway, I am hoping it can be resolved for the OP without resorting to any of that.

Ha. Definitely. I'm pretty sure it will be.

Hey - I've enjoyed this. And seen some gorgeous pictures https://www.flickr.com/photos/davidkhaykin/. Thanks.
Have a good week.

[MalibuBimmer]

The Uniform Commercial Code is helpful in this endeavor, too. Some states have special provisions in their general laws for automobile dealerships. But other than that the results should be the same. The deposit constitutes an option which has been purchased (past tense, done deed, the deposit is gone) by the prospective buyer. The dealer has a reasonable time to fulfill the option. (What is "reasonable" varies from industry to industry and also depends on the nature of the specific transaction. Waiting for an M car that gets mass produced leads to a shorter period of time than waiting for an i8 which is not mass produced -- yet.)

[Big Fred]

By way of background, I graduated from Harvard Law School '87. My background in law (since I don't now practice) equipped me to recognize some of the issues, but not the necessarily the correct answer.

Here is my (self-serving?) analysis:

My deposit showed the dealer that I am a real buyer. Without any credit app or due diligence on his part, the $5,000 served to earn me a spot in line and he could safely assume that I was not just a tire-kicker or dreamer (and I was neither; the deposit did its job, in that sense).

If I actually had ordered the car, the dealer (at that time, but not before) would have potentially incurred damages and the deposit would be there to cover those damages. With my order (and his purchase of a car from BMW on my behalf) I would have put him in a position to suffer losses in reliance on said order.

We entered into no agreement that the deposit was non-refundable. We DID agree that if he couldn't get an allocation prior to year end, then I'd get my money back; we did not agree or discuss what would happen if I backed out. It just never came up.

But here's another point: let's say that some of you are correct and that we had a contract. If this is true, then the penalty for a broken contract is either liquidated damages (an amount that we agreed to up-front) or actual damages incurred.

In my case, there are no actual damages -- the dealer has suffered no harm and not sold any fewer i8s than he otherwise would have. And his duty to mitigate damages would have included selling my car at the MSRP (agreed-upon price) which would have been easy to do.

Finally, unlike a house (which, if off the market, harms the seller because he then can't sell it while it's under contract), this car can easily be sold to anyone at the price we anticipated I would buy.

Was the $5,000 an agree-upon "liquidated damage" provision? Was the $5,000 the amount that I agreed to pay in damages because they would be otherwise difficult or expensive to ascertain? I think not. The dealer's damages are non-existent now and even if the order had been placed and the car resold, those damages (if any) would have been easy to calculate. Liquidated damages are usually for those cases where damages would be hard to figure out.

So, in other words, I don't think my case was clearly covered by a contract -- there was none. I don't think the dealer suffered any damages. And I don't think we had agreed that the price of my option was $5,000 and my failure to exercise said option resulted in liquidated damages to the dealer.

At any rate, my sales guy said his manager just said to refund my deposit. I haven't gotten the money yet; that was just yesterday. And I don't know whether the manager was just being a nice guy or whether he thought that it would be tough to keep the $5,000 on the theory that he had been "harmed" by my breach. I do think I would have had a strong case that (1) there was not a contract of the sort that committed me to buy a car I had not yet ordered, and (2) if there was a contract, it resulted in no damages to him.

[ddk632]

Big Fred Great news that they did right by you. And, kind of funny given the context of the ensuing discussion that you have a background in law

hlmiii Haha, yes it's been a fun discussion, and thank you for correcting where I was off. I learned something new today about some legal theory and also that, mostly due to my dealer having been a great guy, I was one of the lucky ones to just get my deposit back without any hassle.

As for the divorce, condolences on the legal side, but congratulations on the personal side Freedom is priceless, my friend.

Thanks for your compliments on my photos. Much appreciated. And, for the discussion.

[hlmiii]

Originally Posted by ddk632

Freedom is priceless, my friend.

**

Originally Posted by ddk632

Thanks for your compliments on my photos.

You are welcome. Nicely earned.



** Agreed. Been there .......

[Epirali]

Seriously I feel like I should do something to thank you all for the great discussion and the knowledge shared. Now we should all get off the discussion board and go drive our cars (whichever one we choose)...

[DCG]

That is total BS!

[MalibuBimmer]

So, Big Fred, have you gotten your deposit refunded to you yet?

(As an HLS grad, too -- 1971 -- I'm interested in whether your analysis was bought by your dealer.)

[Big Fred]

Originally Posted by MalibuBimmer

So, Big Fred, have you gotten your deposit refunded to you yet?

(As an HLS grad, too -- 1971 -- I'm interested in whether your analysis was bought by your dealer.)

Yes, I received the deposit back.

I never tried to persuade him of anything; I was a lousy attorney!