Millionaire Deposits

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There was no express oral or written agreement between the parties confirming the deposit was returnable.

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A claim arose from the intended purchase of a TVR Tuscan Sports Car.

The Claimant company sought to purchase the vehicle on behalf of a third party client who alleged he was a millionaire. It transpired this third party had been arrested for fraud offences though there was no indication of any convictions resulting from it.

The Claimant approached our member on the purported millionaire’s behalf asserting in court that he had previously purchased several other vehicles for him in the preceding years and so had no reason to suspect fraud and/or the source of the money as a result.

It was, however, only after making two payments as a deposit equivalent to around 15% of the vehicle’s value that it became apparent the millionaire was anything but, and had been arrested with no access to money which meant that the sale could no longer proceed. The Claimant came to court seeking to recover the deposit paid.

The judge was asked to consider that both parties were trading as businesses, and therefore, the underlying principles of business exchanges and contracts should all apply, and he agreed.

The judge considered whether the two payments made in the matter constituted a deposit. He did not hesitate to confirm that the monies paid were a deposit and there was no evidence from either party suggesting the contrary.

While all agreed that the Claimant had acted in good faith at all times and the issues with the purchaser resulting in this transaction not being completed were not of his own making, it did not necessarily follow that sympathy must translate into a successful claim given there was also no fault on the part of our member.

The turning point was that there was no express oral or written agreement between the parties confirming the deposit was returnable, and our member was able to present evidence where the Claimant apologised and confirmed that he had advised his staff to retain deposits to reduce the risks of cancellations and customers finding alternatives elsewhere after costs had been incurred in preparing the vehicle for sale, especially when of high value.

The judge agreed the Claimant had taken on the risk of contracting in the manner he did, and it did not matter if he now considered the outcome unfair or unreasonable.

Neither party had expressly contracted to make the deposit refundable, and there was little to no evidence to suggest there had been an implied term that the deposit was refundable.

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As there had been no breach of contract by our member, who carried out all duties agreed for, including preparing the vehicle for collection and sale, they had no fault here.

The judge concluded that fault here lay with the millionaire who had made the Claimant another victim of his alleged frauds, and these were circumstances beyond the control of all involved when the sale of the vehicle could no longer proceed.

Finally, the judge agreed with our member’s legal representative that the claim having been brought by the Claimant meant it was for them to prove their case on balance of probabilities, while our member, as the Defendant, did not have to prove anything. Having failed to prove their case against our member, the claim was immediately dismissed.

Olabode AdekeyeLegal AdvisorRead More by this author

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