When is a contract not a contract?

legal updates

There are some situations that you must be aware of when a person can withdraw from or cancel a deal and these restrict your ability to sue for breach of contract.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

There are some situations that you must be aware of when a person can withdraw from or cancel a deal and these restrict your ability to sue for breach of contract.

Two of the most common are here:

Distance Selling

If you don’t have face to face contact with a consumer when they order the vehicle then it is considered a ‘distance’ contract. The consumer can cancel the contract from the moment they place the order and that right of cancellation exists for 7 working days following delivery (which starts from the working day following receipt). Saturdays, Sundays and Bank/Public Holidays are not working days even if your business is physically open on such days.

If properly cancelled, the cost of delivery has to be met by you, the trader and not the consumer. The cost of the consumer sending it back can be payable by them but only if it is stated in your terms and conditions. If the vehicle is returned damaged then you may be able to claim for the cost of repairing that but you cannot charge administration or re-stocking fees.

If your website does not comply with the Distance Selling Regulations then the cancellation period can extend to up to 3 months and 7 days. The Regulations do not apply if the seller is not in the course of trade or business OR if the buyer IS buying in the course of their trade or business.

Vehicles sold on finance

A credit agreement is a legal contract only once it is signed by the provider of the vehicle, the provider of the finance and by the customer. Any party can withdraw up to that point and if you begin to carry out valeting, repairs, servicing, MOT etc then you will not be allowed to claim anything back for such items.

There is an additional right that a consumer can cancel a credit agreement within 14 days BUT doing so only cancels the finance and not the obligation to otherwise pay for the vehicle.

The laws on distance selling and consumer credit can be complex and the above represents only very basic guidance.

Wearewood Services LtdMotor Trade Web Specialists

We offer an all-encompassing web, digital & design service specially tailored to the Motor Industry.

Dennis ChapmanIn remembrance of Dennis Chapman 1951 -2015Read More by this author

Related Legal Updates

While We Wait: Preparing for the FCA’s Review on Motor Finance Commissions

As anticipated, the FCA was not particularly helpful when questioned about the various issues of investigating complaints that were outside of the standard retention periods for documentation.

FCA Commission Review: Separating fact from fiction in the wake of scaremongering

Attend a complimentary seminar hosted by the FCA for first-hand information – Scheduled for Wednesday, 24 January 2024.

The FOS reports over 10,000 motor finance complaints: Are we really surprised?

The good news currently is the FCA is focussing its attention on the lender and not our members.

The FCA means business

The FCA are closely monitoring how firms are putting their new rules in place and will take action against those that aren’t following them.

Financial promotion on social media

The FCA’s supervisory approach to financial promotions in social media was issued in 2015.

Customer reneges on agreed not distance sale

Our member explained they do not offer a delivery service and do not engage in distance selling.

Consumer “Handcuffed” by Deduction for Use Settlement

Don’t sign any contract unless you are fully aware of its terms!

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.