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Ask Deborah Awyzio Your Own Question
Deborah Awyzio
Deborah Awyzio, Solicitor
Category: Australia Law
Satisfied Customers: 863
Experience:  Bachelor of Laws (QUT), BIT (QUT), Family Law Accredited Specialist, over 12 years experience
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I placed a $1000 deposit to a Holden dealership in Doncaster

Customer Question

I placed a $1000 deposit to a Holden dealership in Doncaster to have a car built, the deposit was put down in April the 16th and I was told only a few days ago that it will be built in October. my financial situation has changed that I can no longer pay for this car and I told the dealer to cancel my contract, but because it's passed the cooling off period they are going to build it and then force me to pay for it. Is there a way I can cancel it I told them to keep my deposit and I will pay a cancellation fee, but they insist nothing can be done because it's on order.
Submitted: 9 months ago.
Category: Australia Law
Expert:  D. Coleman replied 9 months ago.

Hi Danny,

You would need to review the contract to see if there is any clause dealing with your situation. It should say whether the deposit is refundable or not and what the circumstances. In some cases, you may be able to rely on the doctrine of frustration of contract as a defence to an accusation of breach of contract. Basically, the definition of a frustrated contract is as follows:

"A frustrated contract is a contract that, subsequent to its formation, and without fault of either party, is incapable of being performed due to an unforeseen event (or events), resulting in the obligations under the contract being radically different from those contemplated by the parties to the contract."

You might be able to argue that because of the change in your financial circumstances you didn't anticipate, the circumstances of the contract have changed radically in a way that neither of the parties intended. If a court accepted this argument, you could be excused from the performance of your obligations under the contract. However, the dealership would probably respond by saying that from their perspective there has been no change in circumstances. It seems that there are arguments on both sides.

Another point to keep in mind is that motor dealers are bound by specific motor dealer licensing legislation which is designed to protect consumers. They may be prevented from relying on the contract if they made any false or misleading representations to you in the formation of the contract. An example might be, that you could get out of the contract if you wanted to or that the deposit is refundable. There is a guide to this available here for download:

https://www.consumer.vic.gov.au/library/publications/businesses/fair-trading/motor-vehicle-sales-and-repairs-an-industry-guide-to-the-australian-consumer-law-word.doc

I would also recommend that you contact consumer affairs victoria to see if they can be of any assistance in this matter. Their contacts should be available here:

https://www.consumer.vic.gov.au/businesses/licensed-businesses/motor-car-traders

If you need ongoing representation or advice, you can contact a lawyer in victoria for assistance using the Law Institute of Victoria. Let me know if you would like more information.