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Ben Jones
Ben Jones, UK Lawyer
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i paid a deposit of £1000 on a new car order with a main dealer

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i paid a deposit of £1000 on a new car order with a main dealer yesterday. i want to cancel the order and have my deposit refunded but do not know my rights. i do not believe i have signed anything but did agree verbally on a handshake.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Why do you want to cancel?

Customer: because i regret my decision and because i find the new car would not fit in my garage. it is my fault entirely.
Customer: imhave not signed an order form as this is being emailed to me
Ben Jones :

ok let me get my response ready please

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.


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.


Customer: am i right in saying then that i can cancel if i wish but risk losing some or all the deposit subject to the conditions you set out?
Ben Jones :

Yes, you cannot be forced to buy the car but you may lose some of the deposit if you were to cancel, depending on what losses have been suffered by the dealer

Customer: ok. that clarifies the position for me. thank you
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