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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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About a month ago I verbally agreed to buy a new car on 1 March

Resolved Question:

About a month ago I verbally agreed to buy a new car on 1 March 2015 and left a £500 deposit, but there was never any paperwork raised and no order form completed which I found strange.
I had doubts about the car so I changed my mind, stating unforeseen circumstances as the reason for canceling.
The dealer has confirmed that I can cancel the order as it has not yet been registered, but I will lose the deposit paid.
My question is, Can I get the deposit back or is it now lost?
Submitted: 2 years ago.
Category: Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones :

Hello, my name is ***** ***** it is my pleasure to assist you with your question today.

Ben Jones :

Was there any agreement about the deposit at the outset?

Customer:

Hello Ben,

Customer:

Nothing was said about the deposit at the outset I beleive we only received the till receipt from their machine

Customer:

Another Motor dealer (manager) has told me that without having a clear order form that the deposit must be returned, but frankly I did expect to lose the deposit

Ben Jones :

Generally, when a person places an order for something and pays a deposit they enter into a legally enforceable contract with the seller. It is implied that the seller has accepted the deposit as security and as proof that the buyer wants to proceed with the contract.

Unless the seller subsequently commits a serious breach of contract, or there was a cancellation clause, the buyer would have no legal right to cancel the agreement and if they do so they will be acting in breach of contract and risk losing their deposit. This is especially true if the deposit was described as non-refundable.

As this was a business seller, they will be subject to certain consumer rules and regulations. For example, you will have some protection under Schedule 2, Regulation 1(d) of the Unfair Terms in Consumer Contracts Regulations 1999. It states that if the contract has been cancelled after a deposit has been placed you are entitled to have the deposit returned in full, unless the seller has spent time, effort and money, in which case they can deduct reasonable expenses. Even if some expenses have been incurred, if these are subsequently recovered, for example by selling the item to someone else, the deposit should still be returned in full. It follows that a blanket non-refundable clause that entitles the seller to keep the deposit in all circumstances is most likely going to be unfair and unlawful.

If you are having difficulties in recovering the deposit when you believe you are entitled to have it returned, advise the seller that you will not hesitate reporting them to the Office of Fair Trading and, if necessary, pursue the matter further through the county court. Exerting such pressure could often work in changing the seller's position in this matter.


Customer:

Hi Ben, Thanks for that, but does this still apply without a written contract?

Ben Jones :

yes, you do not need a written contract, a contract would be in place regardless, it would be implied

Customer:

They did state that they have ordered up the vehicle which costs money and also ordered a towing bracket but I do not know any costs except for the actual new cost of the vehicle ie £35800 but even then I am not sure if this included metalic paint, I was only given a rough idea of the monthly cost for a pcp style payment but at no stage have I seen or been given a contract.

Customer:

Okay so just to be clear, do you beleive that I should be able to reclaim the deposit?

Ben Jones :

depends on what, if any costs, they have incurred from this order and if they can be recouped or minimised. So you can certainly ask them to justify these costs and get an idea if it is worth pursuing

Customer:

Ok, That seems fair enough, I certainly feel that under the circumstances they would be able to sell this vehicle on, they say that they cannot return goods such as towing brackets, which I don't believe to be true although I can believe that the cost of a tow bar these days would exceed the deposit. SoI may write the letter as you mentioned but I won't push this too far because it was me who changed their mind and admittedly at almost the last minute.

Ben Jones :

If you don't try at least you won't know what you could have achieved so the least you can do is to give it a shot

Customer:

Ha, I agree, Thanks for you help, I shall give it a shot for the sake of a letter. I will include the trading standards angle as well for good measure, but am I allowed to say I have taken the matter under legal advisement?

Ben Jones :

yes you may do so of course

Customer:

Ok, Thanks again, you have been extremely helpful. Regards Kevin

Ben Jones :

you are welcome, all the best

Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46182
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
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