Consumer “Handcuffed” by Deduction for Use Settlement

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

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One of our clients had an issue with a car sold to a customer. Eventually, the customer sought to reject the car. Our client did not agree with her but nonetheless made the sensible decision to try to settle before the matter went to court.

Our client advised her that there would be a 50p per mile deduction for use, resulting in a deduction of some £2000.

She attended the dealership and signed a “buy back” contract, stating that deduction. The amount was paid and the car was returned to our client. The customer then brought a legal claim for the £2000 on the basis that our client had no right to deduct given that (in her opinion) the car was defective from the outset and that she was entitled to reject.

At the court hearing, the judge raised an eyebrow at a deduction of 50p per mile and expressed a view that this was “a little steep”. Until that is, he saw the contract signed by the customer agreeing to it. The judge then said it was not something he could intervene with. The customer had freely entered into that agreement, expressed no disagreement at the time, and nor did she state that she viewed it as a “part” and not a “final” settlement of the rejection process. The freedom for parties to enter into contracts without retrospective judicial intervention, just because one party subsequently felt that they had committed themselves to a “bad bargain”, has been in existence for centuries. It was also submitted that the court had absolutely no ability to intervene when the “price” of goods/services had been decided upon freely. The customer was thus “handcuffed” by what she had signed and the court dismissed her claim.

The motto here is – don’t sign any contract unless you are fully aware of its terms and that you are in total agreement with them. And just because a document doesn’t state: “This is a legally binding contract”, it doesn’t mean that it won’t handcuff you to it either. Even if a document states: “This is not a contract” does not necessarily mean that it isn’t. In some cases, it is the intention of the parties as much as the actual words that can be important. 

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Jason WilliamsLegal AdvisorRead More by this author

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