As the bard might have said, ‘A Ford, a Ford, My kingdom for a Ford’.
Probably a Mustang.
But who has title to the Ford when it is for sale on a Sale or Return (SOR) basis? And how does that title pass when the vehicle is sold?
There have been a few Sale or Return shenanigans over recent years where sellers and traders alike have been thrown into the maelstrom of trying to get their money back, or prove that they have legally purchased the vehicle and are not obliged to return the vehicle or return funds to the seller.
I have dealt with the scenario where our member is selling the vehicle here, https://www.lawgistics.co.uk/blog/legal_updates/sales-on-behalf-of-a-third-party/
However, a few years ago we had the case of Steve Mann Caravans where they may have potentially held onto over a million pounds from sellers who were selling their caravans on a SOR basis. The last we heard, charges had been brought against some of the Mann family by the police.
Last year GVE London went into administration and we had articles showing owners trying to get into the premises to retrieve their vehicles, which they had left with them to sell.
Then, at the end of January, Targo Florio Cars entered liquidation, with the Director filing for bankruptcy, and again owners of vehicles discovered their cars had been sold without them knowing. That story is still developing, but some owners are reported as having got (some of) their money back.
So, back to the question: who has title, and when does it pass?
The owner of the vehicle obviously has title. That may be an individual, or a company.
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When they decide to sell on a SOR basis, they are entering into an agreement to sell that vehicle’s title, but the company undertaking the SOR does not have title. The owner retains title and is simply giving permission to sell it.
Therefore, when the vehicle is sold and payment is made, good title passes to the buyer of the vehicle.
If the SOR company does not pay the seller, title has still passed, as they were authorised to sell the vehicle. The buyer’s contract is to pay the SOR company, not the seller. The SOR company has a separate contract with the seller to pay them, less whatever commission has been agreed. A failure to pay the seller is a breach of contract between the seller and the SOR company.
The seller does not have a cause of action against the buyer.
Obviously, if there is a finance company involved, and they have not been reimbursed, they retain title. Always carry out a finance check, and always ensure you pay the finance company directly to avoid that scenario.
So, if you have a dispute involving Sale or Return, please contact us sooner rather than later to ensure you know your rights. If you are unsure where you stand, our legal team can help via the telephone helpline and, where needed, we can step in with casework support to help you take the next steps.
