In HJ's motoring column in today's torygraph, a couple agreed a trade in on their car and agreed a px with a car dealer. When they went to sign the dealer offered a reduced trade in value. HJ says there was nothing they could do about it because nothing was signed.
Er sorry!? Of course they can do something about it! A verbal contract is as binding as a paper one (and don't let anyone say it isn't!).
An immediate trip to trading standards would have landed the dealer in trouble and possibly forced the dealer to reinstate the status quo.
If people continue to walk away from such situations, dealers will continue to cráp on the public in this way and think they can get away with it. Don't let them.
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Absolutely not. No contract without consideration. No consideration was made, so no contract took place.
HJ
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Well I think any solicitor would agree a verbal agreement on price, both for the trade in, cash balance due or finance and therefore final price had been agreed for the sale.
I maintain the 'buyers' should have taken it further and they would have found the law is clearly on their side.
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Not at all. It may have been a vague discussion on an approximate deal dependent on all sorts of factors. No money actually changed hands and nothing was signed because nothing could be until the dealer had done his sums. I'm surprised at you Watcher. Surely you must be aware of how the public fabricates all sorts of nonsense to try and get a better deal. The public is allowed to lie. Dealers aren't.
HJ
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Look at it from the other perspective. How many people have viewed a car, told the dealer they would buy it and then changed their minds. I have, you may have done too. Imagine if you had recieved a letter from the dealers solicitor saying they were enforcing the contract through the courts.
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That's exactly the point Tom. Many members of the public have found themselves in that situation when (admittedly not car dealers) have taken them to court for agreeing to work being done then changing their minds.
Sure it goes both ways. No problem with that but facts are facts and I think the couple in question COULD have done something about it. And, I suspect they'd have won.
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There are 2 points to be made here. Consideration merely has to be adeqate, but that can consist of a promise. If the offer of the buyer to purchase the car is on the basis of the agreed value of the PX, and that offer is accepted, then there is a contract. Case law: Dunlop v Selfridge Ltd [1915] AC 847, is as follows:
"An act or forebearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable."
If the dealer has made an offer for the car, and that offer is accepted, the consideration by the buyer is the agreement to go ahead. Here, he/she does not flog the car to someone else, e.g. privately at a greater and has made a bargain with that dealer, to be fulfilled at a future date.
Now in real life the difficulty is proving this. But if the two sides have agreed the sale, then the die is cast.
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Would be interested in an opinion from you guys on the following, you seem to know your stuff.
Was in Reg Vardy Jaguar in Stockton, they had a V reg Merc SLK for sale with a screen price of 24995. We had a Ford Ka S reg with 62k on it to trade. Haggled the salesman down to a 19500 price to change, he disappeared to his sales office a couple of times, finally we agreed this and we shook on it. There was a witness salesman sitting at the desk next to us.
When it came to filling in the paperwork his final price to change was listed as 21500. I nearly signed but eagle-eyed GF spotted it and stopped me.
When challenged, he disappeared for a minute and came back saying "sorry, the price of the car is 24995, take it or leave it". We walked. Could we have held him to a "contract"?
mike
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What Im saying is these 'verbal' contracts are legally binding but you may have to take your case to court where one party decides to renage on the deal. To have that contract upheld, you may have to take it to court.
However, the threat of such action plus if you confidently explain the position to the salesman MAY mean they back down rather than have the court costs and bad publicity go against them.
The reason garages say take it or leave it is because they know few people have the confidence to challenge them there and then or, say 'I'll see you in court, then.'
We are talking a different scenario from one where a garage has a car on sale for £x. This is merely an offer of sale and does not place any requirement on the seller to sell the goods at all.
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Not true. Consideration does not have to be adequate at all. It merely has to have some value - however slight. See Thomas v Thomas 1842.
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Watcher,
I agree with your sentiments, but, as HJ says, there is very little trust these days...with the result that a verbal agreement in not worth the paper it is written on?
Regards,
Matt35
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I think you are quoting Cecile B DeMilne or is it WC Fields?
Fact is, there is legislation and case law in the UK to uphold the opinion that verbal contracts can be and are a matter of fact.
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Would you trust anyone to a verbal contract?
Unless you have independent witnesses, not much chance of enforcement. (yes there is case law but there are also legal costs and risk).
When I buy a car, I always pay a deposit and get a receipt with details of the agreement e.g. total purchase price £xxxx. Then consideration and documentation mean it is foolproof.
Ditto when selling a car: I accept no offers without the reverse of a deposit and documentation.
Saves an awful lot of hassle and wide boys generally won't do it..
madf
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The point is not whether you trust a verbal contract or not but what it is worth in law! And the law says it is as binding as a paper contract.
Therefore, IF someone was in the circumstances as the said couple regarding the car purchase, there IS something they could have done when the dealer reduced the trade in value.
I fully agree that it goes both ways and I fully agree you may not win in a court but, the fact of the matter is if you can show to a court what was agreed, they would more than likely find in your favour.
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" if you can show to a court what was agreed"
that's the rub!
madf
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Watcher,
I am probably quoting either DeMille or DeMilne, there is an L of a difference but - not important.
I am not a lawyer but cannot see any logical basis 'that verbal contracts can be and are a matter of fact'.
Can you quote the actual legislation - I am genuinely interested in how a law could be drafted to make judgement on a conversation between two parties who are either lying or do not have a correct memory of a conversation.
Regina V Paul Burrel V Daily Mirror for example?
Regards,
Matt35.
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I suggest you look at nortones2 post higher up then. After that, youcan look further down to the Parker(?) judge.
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Verbally agreeing to buy or sell something does not constitute a contract. This can be shown in the housing market, where the buyer or seller can change their minds at any time before contracts are signed, no matter what expenses have been incurred by the other party during preperations for the deal, or what promises have been made as to the intent to complete.
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Tom: property law is different, as you say. property law in England and wales is a special case. I can't remember exactly why buying and selling property in England (Scotland is different as usual) is subject to the exchange of written contracts, but it is. That does not however mean that verbal contracts cannot exist. Any basic legal text will make this clear.
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I understand from a news article yesterday that the Government is considering legislation to make gazumping illegal.
As Nortones says buying property is different but it appears moves are being made (at last!) to bring it into line. I'd also say there is case law to prove a verbal agreement is as binding as a paper one.
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I am not disputing the fact that a verbal contract is legally binding, as in the case of work carried out for an agreed fee for example. But in the case of promising to buy or sell goods to someone, until money has been exchanged or a signature has been obtained, no contract has been entered into. Either party is free to walk away at any point up to then. The housing situation is no different to the case of the car dealer in this thread, the same common law applies to both.
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We'll have to agree to differ then. :-)
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Wait till tomorrow. We're on Pugugly's territory here, he'll settle it.
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Several solicitors have e-mailed me about this one. A verbal contact is a contract if a price (ie considation) is agreed. But it isn't if the price isn't agreed. In the case of the punter in the paper, the final price could not have been agreed because it depended on finance being accepted, and that, in turn, depended on a deposit acceptable to the finance house, which depended on the value of the part-exchange. So all we really had was a detailed disussion, but not a binding contract.
HJ
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HJ: that seems to clear it up for the punter in question:)
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Does it? Im no lawyer but even I can see the agreed price inquestion is the price of the car being bought not how the balance between trade in and sale price!
I still think the potential buyer had a very strong legal case.
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Whenever a punter pulls out of a deal we always put his deposit in the holiday fund,never ceases to amaze me how much money they will walk away from.Anyway,we always enjoy the holidays.
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I do have a little memory on what constitutes a contract when some legal eagle called Fenton Bresslaw used to have a column in one of the newspapers (don't recall which one) giving small case histories.
This must be 40 years ago I read this and I recall he answered this question as follows.
Lord Chief Justice Parker set a precedent using the following example.
If a man called across a river and shouted "how much would you charge me to come over and row me across the river"
The boatman replied "Two shillings and sixpence"
The man shouted back "I agree, come on over"
According to Parker that became a legal contract.
As I said that was a long long time ago and perhaps a later precedent has become the norm.
alvin
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5 factors determine whether or not there is a binding contract (it does not have to be in writing)....
1)Offer
2)Acceptance
3)Consideration (which maybe money or taking some action or forebearance)
4) Intention to create a legal contract
5) Certainty of terms
In my view HJ is right. When buying a car from a dealer no contract is formed until the money passes hands and/or the contract is signed. Until the deal is done it would be almost impossible to show that (by agreeing a figure) the dealer intended to create a legally binding contract.
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For a contract to exist the parties must also have 'capacity to contract', and there must be a 'genuineness of consent of the parties to the terms of the contract'.
Verbal contracts certainly are equal to written contracts but they are usually easy to void because the terms of the contract are rarely complete - if the terms are not clear or complete the contract becomes 'inchoate'.
It is also correct that contracts for the sale of land, in England and Wales, can only be made in writing. You cannot sell land or even give it away without a written document.
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Would it make any difference if the customer made notes on what the dealer was offering?
teabelly
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Alvin - you so seem to have a remarkable memory. If you are not joking, here is a serious question (not a joke): Have you considered writing your will to allow your brain to be left for medical research - it might help find a cure for dementia! Again, I emphasise, I really am serious in making this suggestion.
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I defer to pugugly, but as a lawyer myself, can I add my 2 penn'orth?
There is nothing in las that says that a verbal contract cannot be binding. The specific exception if land, where the Law of Property Act requires all contracts to be in writing.
A contract is perfectly valid even if it provides that both parties will perform it in the future. The consideration in a case like this is the exchange of promises.
HJ's reader probably had a binding contract. I accept what HJ says about the deal being conditional on acceptance by the finance company. The law recognises conditional contracts. However, If the condition is fulfilled, the contract becomes binding. The dealer was under an obligation to put the agreed terms to the finance house, and if they accepted it, the deal became binding.
The problem here is not one of law but one of proof. If a written note of the deal had been made and signed off, or if a deposit had been taken, it would be very difficult for the dealer to claim that there was no agreement. Perhaps a case where paying a deposit was in the punter's interest?
However, a court is most unlikely to order the dealer to go through with the deal. To do this, it would have to decide that it was appropriate to order the contractual remedy of "specific performance". You cannot get this if damages are an adequate remedy. If the punter had negotiated a particularly good deal, it may be worth doing.
Legalities aside, the dealer would have known that the punter would have had to bring a small claim in the county court, and use up valuable time and effort in running the case. 99 out of 100 people can not be bothered
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Pedantic point:
'verbal' means using words (Latin, 'verbum'), whether written or spoken.
'Oral' is the word for non-written communication by mouth.
'Non-verbal' means communication by means other than words, eg gesture, hand-shake, smoke-signal, etc.
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M.B. Despite your reassurance I have a sneaking feeling that you had a little smile on your face when you posted the above not that it matters.
But seriously most of us have a good memory but it's on a selective basis only. By that I mean our brains remember things which leave an impression for whatever reason and discards enormous amounts automatically.
Another thing I notice as we get older is that our short term memory decreases slightly but long term remains constant.
As regards leaving my brain to medical science to help find a cure for dementia, my wife's Dad who died recently suffered from this dreadful condition although he was in his 90s.
I would visit him in his nursing home and it was sad to see that whilst he had difficulty in recognising and remembering us, he could talk on very early events in his life.
alvin
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I know this is getting a bit off-topic but Alvin makes an interesting point about our brain automatically discarding enormous amounts of (useless) knowledge. It is believed that people who suffer Autism but are able to perform miraculous feats like drawing buildings in detail and to scale after just a fleeting glance can do this because their brain does not automatically discard information received.
Getting back to the subject, the lesson here is to always ask for the figures to be written down, even if only in the form of a hand-written note on the back of the seller's business card. Just ask: "Please could you write that down for me so I don't forget the figures". As was once said: "Oral agreements aren't worth the paper they're written on" ... or something like that.
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M.B. Despite your reassurance I have a sneaking feeling that you had a little smile on your face when you posted the above not that it matters.>>
On the contrary, like you I know people (three of them) currently going through various stages of dementia. It is really heart breaking and very painful to see them "suffer" in this way.
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