Hi forumers,
Just wondered if you could possibly give me some advice. I am looking to get a van for my florist business and originially thought about going down the contract hire route. I was looking at the Nissan Primastar and found a couple of places online who looked like they had some good deals.
I contacted one who gave me a contract hire quote which sounded OK and after giving it some thought I gave some details to go through the finance check. I was passed for credit and was sent an order form confirming the price etc. I was told they were looking for some stock availability so the order form was just a sort of confirmation of the price and vehicle etc without actually having a vehicle details on it, colour, registration number, extras etc. I told the guy that I needed a vehicle ASAP.
In the meantime the other company got back to me and after discussing some finance options with them they suggested going for a finance lease which gave me a bit more flexibility of perhaps buying at the end or selling it midway through the contract if needed. This sounded a good deal and after speaking with my accountant I asked this company to check stock. They came back with an excellent deal, a vehicle in stock and whats more they are very local to me. I went through the credit, I paid a credit card deposit and have got the Reg & Chassis numbers here and once the docs have been signed i can expect the vehicle delivered to me next week.
Meanwhile I hadnt heard from this other contract hire company so when I phoned to tell them that I now had a vehicle secured elsewhere they told me the 'order' was only cancelable if I paid a £750 + V.A.T. fee. Now, I never paid this first company any money, they didnt tell me what vehicle I was 'ordering' and they were still checking stock.
So, now they are threatening me with legal action etc if I dont pay them this money. But surely they couldnt have incurred any costs within TWO days?? Furthermore, I don't want the contract hire deal and this company are based some distance from me.
Can anybody please give me some advice as to whether this first company have a case against me. Yes I did sign an 'order' form but what did I actually order since there was no actual vehicle involved.
Thanks in advance for your advice.
Kind Regards,
Kelly.
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No good asking us. Unless you tell us *exactly* what you signed.
Take a copy along to CAB or a solicitor.
Did you sign as a business or personal? I dont think businesses get the benefit of the distance selling regs.
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Well I was going to say that seeing as you hadn't paid a deposit then I thought you were in the clear. But then you said that you had signed an order form which indicates to me that you have entered into a contract.
You need to get proper legal advice.
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How can a dealer claim you have placed an order? For what exactly? No vehicle details in terms of type of vehicle(car,van, pick-up,mini-bus). Colour, trim, engine type or any other details that would be regarded as essential to ordering anything. They are trying it on. Go to their premises and tell them they are behaving badly and to file the 'order form' where it belongs; in the waste bin. They cannot have incurred any costs over and above the normal searching for vehicles they do for everyday business anyway. If they claimed an order for every vehicle they tried to source and quote for as part of being in a competitive market they would be the richest company in the universe. Tell them to go and jump, you will never hear from them again. Concrete
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Any lawyer will tell you there has been no "CONSIDERATION" for the contract. It's a try-on, there's no way they could claim 750 from you - invite them to sue you through small claims. Get the local paper to cover the story, or at least threaten to; that should make them back down.
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Did you sign the order form?
So long as nothing is signed & no payments were made, they don't have a leg to stand on.
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concrete is spot - on .
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Without knowing exactly what you have said to them and exactly what you have signed (if anything) it is difficult to comment.
You may have a verbal contract for the first and if the transaction was over the phone they may have a recording of what you said.
Speak to CAB or a solicitor
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I'm amazed that people can be so certain without knowing what has been signed.
We know that an order form of some sort was signed for a specific type of vehicle at a specific price. I dont see how the fact that the reg number and colour were not specified makes a difference. No reason that a cancellation fee could not have been part of what was signed.
The OP could easily have signed a binding contract for the company to source a vehicle or indeed a credit agreement.
Remember that rules for Individuals are not the same as rules for businesses.
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SFAIK, and only a minor point, if they do have a recording of what was said it may not be valid unless you were told that a recording was being made. The sort of thing you hear when you phone up re insurance quotes and other financial things.
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Many thanks for your responses, this is my first opportunity to log back in.
Basically I have signed an order form agreeing to a contract hire at an agreed price. The order form does say if I cancel the order I will be liable for 3 months rentals + V.A.T.
However whilst the vehicle details are on this form, there is no vehicle specifics i.e. colour, registration number etc. I have not paid a deposit and there was no vehicle in question to order as I was waiting for the company to come back to me with some available vehicles. I said I needed a vehicle asap so they were checking current stock. But as they hadnt found a vehicle for at that point then surely its not an water tight order?
So, in short:
YES I have signed an order form for 'a' vehicle not 'the' vehicle. YES it does say if I cancel the order there will be costs incurred.
At the point I wished to cancel they had not told me what vehicles were available therefore what have I actually 'ordered'?
So my point is as there is not an individual vehicle in question are these lot trying it on? I mean if there was even a colour of vehicle on the order form that would mean I was ordering THAT vehicle but there were no individual details at all linking me to a specific vehicle.
Edited by munchkin on 21/11/2007 at 10:34
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Its good this one - its just like an exam question!
I think a lot of this will hinge on the behaviour of the company involved, eg how long did they say it would take to source a vehicle, was the length of time taken a breach of contract, does the fact there is no vehicle details mean that the contract is invalid. Can the 3months rental be taken to include before a vehicle was sourced.
Given the (lack of) information available, I would be tempted to pose the question: What are they going to do about it? Small Claims Court? Do you think their case would stand up, or would the contract be unfair under the Unfair Contract Terms Act?
Have you taken any legal advice? You don't say what trade you are in, but many of the professional trade associations offer legal advice (admittedly at a basic level, but this is relatively basic)
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Im a florist and this was my first port of call after some advice from a friend. i will look at some legal advice but my point is, if I just ignore this companies calls etc will they just get bored and move on? i mean, surely they couldnt have accrued any costs further to any other everyday enquiry.
this was all done within a day, i havnt signed any finance forms or paid any money. if they had registered a vehicle and i had signed all of the finance docs etc then that would be a different situation but I just think they are being totally unreasonable. i had never agreed to a specific vehicle so.....
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Munchkin - I am advising you to take proper legal advice .
I have been buying and selling in business for forty years and therefore know a little bit about making contracts .
IMO having signed an order is not a contract in this case.
As someone says above , no money has changed hands and therefore it appears one of the essential elements of a contract is not there.
You may also have a case with the unreasonable contract terms, so I reiterate , take proper legal advice.
It is easy to be wise after the event but it just proves that you should never sign anything unless you are sure of what you are letting yourself in for. I always read everything I sign ( and I sign a lot of contracts ) front and rear and if I do not understand or am not happy with it I keep asking questions until I am happy or it doesn't get signed.
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As someone says above no money has changed hands and therefore it appears one of the essential elements of a contract is not there.
I don't think that money has to change hands immediately for a contract to be binding. The contract could specify that money (consideration) has to be paid at a later date.
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Have they put the demand in writing or have they just made it over the phone. If its the latter then they probably know that they're just trying it on.
If I remember my A'level law correctly ambiguous contracts aren't legally binding. They don't stand a chance.
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IMO even if you have said in writing that you want to make a purchase, signed an intention to purchase and agreed to the other parties terms, if they have not confirmed availability, specification and a delivery date for an item that meets your specified requirements then they cannot enforce a contract.
Though as has been said, unless the other party capitulates in the face of such argmentation, then you need to take legal advise.
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I am with Helicopter apart from 1 thing:
Money does not have to change hands for there to be a contract, just offer/acceptance AND consideration and consideration can take many forms (not necessarily money).
get legal advice.
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Well I deal in contracts, purchase orders etc every day and I would say that signing an order form means that an order has been placed.
One thing I would never do is to sign a supplier's order form because that means you're agreeing to their terms and conditions. I would send one of our POs.
Plenty of POs come in to our business with very tentative information and are executed without any problems. Money never changes hands up front - we invoice with the shipment and the customer pays the invoice.
I would suggest that, for the avoidance of doubt, you write to them and say the order was tentative and as they didn't confirm necessary details then you no longer wish to proceed.
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Well I deal in contracts purchase orders etc every day and I would say that signing an order form means that an order has been placed.
Though if they have not confirmed availability, specification and a delivery date then they surely cannot enforce a contract ?
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Though if they have not confirmed availability specification and a delivery date then they >> surely cannot enforce a contract ?
Why not? They could come back and say OK, here's the colour, spec and delivery date - the buyer couldn't really object as they've already signed the order.
Cancelling the order brings it to a close so all those points are irrelevant anyway. I guess what you could do is keep stringing the supplier along, saying the spec wasn't right etc - but that's not a satisfactory way to proceed.
If, as stated, delivery was critical then a stated "deliver by" date and something like "timely delivery is the essence of the contract" endorsed on the order would have been in order.
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>> Why not? They could come back and say OK here's the colour spec and delivery date - the buyer couldn't really object as they've already signed the order.
No, because they might come back and say, for instance, we can do a silver one with satnav in December though if you want Xenons it will be a black one and not until January, i.e. the buyer does not have the info required to commit.
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Hi Kelly,
Your local TSO (Trading Standards Office) will be able to advise you of your situation.
Do a Google search using, Trading Standards and your towns name, and you will (should!) get their contact details.
Hope this helps.
Dave.
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Right Ive got the order form here and this is the bit of the small print in question:
XXXX reserves the right to levy a cancellation fee, which will be limited to no more than the initial rental or advanced installment plus V.A.T. in the event of any cancellation, once credit line is offered and a vehicle has been ordered in accordance with your instructions as detailed above. XXXX reserves the right to pass on any consequential loss.
So, what do you make of this. This is the part that is in question I suppose "once credit line is offered and a vehicle has been ordered" well what vehicle have I ordered? An invisible Primastar?? And what losses have they incurred?
Your thoughts please and also many many many thanks to those that have offered their advice and opinions on my situation.
Kelly.
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Right Ive got the order form here and this is the bit of the small print in question:
OK - my reading of what you've written is that there are two separate things there:
1) Cancellation fee, which they reserve the right to charge if you cancel. Arguably, it's irrelevant whether they ordered a vehicle. You entered into a contract for them to supply you with a vehicle (details TBA) and now you're cancelling that contract.
2) Consequential loss, if they had gone ahead and ordered a vehicle, maybe got it in etc, then they'd have to sell it and would pass the loss on to you.
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Doesnt make sense, for instance:
OP: "I want a van delivered in Dec, what colours and specs can you supply?".
Dealer: "Let's sort out the paper work and I will then let you know what colours and specs I can get tomorrow".
OP: "OK".
Next day
Dealer: "We can deliver a silver one with satnav in December though if you want Xenons it will be a black one and not until January".
OP: "I must have Xenons, and it must be silver, and I would really rather not wait until January, reckon I will have to go elsewhere".
How could the dealer enforce a contract?
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Playing devils advocate, they could enforce the contract because the buyer signed it!
IF (and it is a big IF) this ever went to court, I could well imagine that the dealer would say that the £750 cancellation fee is to cover their work in searching for suitable vehicles. Just because the buyer didn't agree on a specific one, doesn't invalidate that they signed an order asking the dealer to search and agreeing to pay a penalty if they cancelled.
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Doesnt make sense for instance: ...
Well, I did suggest earlier that one way to proceed might be to just drag it out until the supplier gives up.
However if the supplier asks what the buyer wants, and then says they can meet it, what happens then?
I am in no doubt that the buyer has placed an order and that she signed the suppliers contract which would enable them to seek compensation for cancellation. Whether the supplier ordered the vehicle or not doesn't matter - they're now going to lose the profit that they could have reasonably expected make from the deal. The buyer is now going to have to rely on the goodwill of the supplier to waive the cancellation fee.
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Is there no mention of a "cooling-off" period? i thought most contracts had a 7 day one these days!.
Billy
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not applicable to businesses I think
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Munchkin - Might be worth exploring the European Law route re cooling off period. I seem to think it's 21 days on a business to business deal. Don't quote me mind ! Not sure how you find out but someone will know. Just a vague memory at the back of my mind that people have invoked this successfully.
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The sum at issue is £750 - not a massive amount in terms of commercial deals and not worth buying more than 30mins of lawyers time.
I'd be inclined to call their bluff and wait for them to sue. Even if you lost in the small claims court costs would not be much more than the £750 plus the court's issue fee. But I doubt they'd push it that far.
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By signing the order, the OP made an offer. Until the offer is accepted by the seller having a suitable vehicle, available at the right time, the contract is not complete. Important aspect is agreement on the objects of the contract, the "meeting of minds". If the details of the vehicle were important, as well as time of delivery, and the details/availability not clarified, the objects are not certain. The contract is void. No real contract exists at the time the OP offer was withdrawn. IIRC, from undergraduate days. But, I must stress OP has to get professional advice on this. Chat room comments are not authoritative!
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No real contract exists at the time the OP offer was withdrawn.
Issuing a PO or (worse) signing the suppliers order form is generally a legally binding contract. Most big businesses don't like formal acknowledgements against their PO's as that then gives the supplier the opportunity to claim their own T's & C's apply.
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Uncertainty can void a contract, especially where the spec/timing of delivery is important to the purchaser. All down to the facts, which we don't have a full grasp of.
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Munckin, have you sought professional advice? The BR is a great place but nothing posted here will have any value to you in a dispute
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It does sound like they have a keen understanding of contract law, to say the least. I imagine also , it's a well travelled route for them & your signature on the 'order' would satisfy most terms of a legal contract.
This is a guess, but perhaps this tactic is a normal revenue stream for the company, just like
canvassing companies lure people into 'contracts' to advertise their cars & bill them on the strength of a verbal 'contract'.
I've no idea how this would go if tested in court, the OP hasn't provided enough detail, the moral & lesson to be learned is: don't sign stuff unless you understand the implications & outcomes. The more sanguine might simply regard it as a £750 business training seminar fee.
Do get legal advice though. All the above is merely lay comment & observation.
Edited by woodbines on 22/11/2007 at 00:41
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Munckin have you sought professional advice?
That is exactly the thing to do.
Phone a solicitor, or firm. Outline the problem, and ask whether they can deal with it.
See them, taking all bumph and a timeline, + what you said, they said. Just that, not your opinions, or anyone elses.
Let me guess... provincially? £200.
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