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Ben Jones
Ben Jones, UK Lawyer
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I recently put a deposit down for a car, before viewing it

Resolved Question:

I recently put a deposit down for a car, before viewing it in person as I was away.
The car was described as an excellent example, but this was not the case.
There was damage to the paint, a chip in the windscreen and the front tyres were bald.
None of this was mentioned in the advert and the dealer is refusing to give my £500 deposit back!
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Customer: replied 1 year ago.
Hi Ben, what are your thoughts on the situation?
Expert:  Ben Jones replied 1 year ago.

Hi there. Is the vehicle still with the dealer? Also, how long ago did you pay the deposit?

Customer: replied 1 year ago.
I paid the deposit on the 28/08/16 and yes the car is still with the dealer
Expert:  Ben Jones replied 1 year ago.

OK thank you for your response. As we are practising lawyers and do this in our spare time there may be a slight delay in getting back to you as I am in the final day of a complex trial today so may not be out until late. Rest assured that I am dealing with your query and will respond as soon as I can, no later than tomorrow at the latest. Please do not respond to this message as it will just push your question to the back of the queue and you may experience unnecessary delays. Thank you for your understanding

Expert:  Ben Jones replied 1 year ago.

Many thanks for your patience. 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.

In this case you can argue there was a breach of contract through misrepresentation because the car was not as advertised.

Secondly, if 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.

This is your basic legal position. I have more detailed advice for you in terms of the steps you must follow if the deposit is not refunded, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

Customer: replied 1 year ago.
Thanks Ben, it's a 5 so far!What is the course of action from here?I have already informed the dealership I will be taking legal action!
Expert:  Ben Jones replied 1 year ago.

Thank you. The general procedure is as follows.

Whenever a dispute arises over money owed by one party to another, the debtor can be pursued through the civil courts for recovery of the debt. As legal action should always be seen as a last resort, there are certain actions that should be taken initially to try and resolve this matter informally and without having to involve the courts. It is recommended that the process follows these steps:

1. Reminder letter – if no reminders have been sent yet, one should be sent first to allow the debtor to voluntarily pay what is due.

2. Letter before action – if informal reminders have been sent but these have been ignored, the debtor must be sent a formal letter asking them to repay the debt, or at least make arrangements for its repayment, within a specified period of time. A reasonable period to demand a response by would be 10 days. They should be advised that if they fail to do contact you in order to resolve this matter, formal legal proceedings will be commenced to recover the debt. This letter serves as a ‘final warning’ and gives the other side the opportunity to resolve this matter without the need for legal action.

3. Before you consider starting legal action you may wish to consider sending a formal statutory demand. This is a legal request which asks the debtor to pay the outstanding debt within 21 days and failure to do so will allow you to bankrupt the debtor (if they are an individual ) or wind up the company (if they are a business). For the relevant forms to serve a statutory demand see here: https://www.gov.uk/statutory-demands/forms-to-issue-a-statutory-demand

4. If you wish to go down the legal route instead of a statutory demand, a claim can be commenced online by going to www.moneyclaim.gov.uk. Once the claim form is completed it will be sent to the debtor and they will have a limited time to defend it. If they are aware legal proceedings have commenced it could also prompt them to reconsider their position and perhaps force them to contact you to try and resolve this.

Whatever correspondence is sent, it is always advisable to keep copies and use recorded delivery so that there is proof of delivery and a paper trail. The court may need to refer to these if it gets that far.

Customer: replied 1 year ago.
Okay thanks a lot Ben!Is it okay to give you a message in the next few days to let you know how it goes?
Expert:  Ben Jones replied 1 year ago.

Of course you may

Customer: replied 1 year ago.
Hi Ben, hope your weekend is going well!The dealer is persistent in saying I can't have my deposit back.I have told him it is illegal and unlawful for him to keep my money.I have given him 7 days to pay me the deposit if not should my next step be a written letter or is email better?I really need this money back!ThanksSean
Expert:  Ben Jones replied 1 year ago.

It does not matter if it is email or letter to be honest as long as it reaches him

Expert:  Ben Jones replied 1 year ago.

I did say letters as if you send them via recorded delivery then at least you have proof that they have been delivered and received by the employer

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