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Hi, We live in Calgary, Alberta and signed an offer to purchase…

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Answer 1

Answered in 6 minutes by:

5/14/2013

Lawyer: Law.Hut, Lawyer replied 9 years ago

Law.Hut, Lawyer

Category: Canada Law

Satisfied Customers: 7,846

Experience: with over 15 years experience.

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Hello:

This would be a breach of contract on your part, so you would owe the dealer an amount to cover his reasonable losses or expenses that occur because of that breach.

The losses or expenses the dealer could claim would be the administrative costs in ordering the car, or in stopping the delivery of the car, or in storing it until it can be sold to someone else if it has already been delivered. The dealer has an obligation to take all reasonable steps to try and keep the loss as low as possible, such as cancelling delivery if that is possible, or trying to sell the vehicle to someone else as soon as possible.

The dealer cannot successfully sue you for the value of the car or try to claim that you owe the full purchase price, because they have to take steps to minimize their loss, and so they can simply sell the car to someone else.

Answer 2

Lawyer: Law.Hut, Lawyer replied 9 years ago

I understand that this was a car on their lot already. But that does not change the fact that if you walk away now you could be sued for breach of contract. The lack of a deposit does not alter that. Even if the car was already on the lot they will have costs to resell the car to someone else. I expect those will not be significant and they may not want the hassle and cost and employee time and possible bad publicity in suing you, but no lawyer can tell you that the risk is zero.

Answer 3

Lawyer: Law.Hut, Lawyer replied 9 years ago

Regarding payment of the deposit, I cannot say for sure without seeing the actual paperwork. It will depend on how the deposit is described. If the offer is made conditional that it only takes effect once the deposit is paid, then there is no binding contract in your case. This is the interpretation that would make the most sense to me. The seller would not normally want to have a contract that would force them to go through with the sale in a situation where they had not yet received any money as deposit for the vehicle. That would force them into having to hold the vehicle with no money down and be unable to sell it to anyone else until the contract expired. So most likely there is no binding contract in your case, but bear in mind that I cannot say for sure without having seen and reviewed the contract in detail.

On the other hand, if there is a binding contract as soon as you sign the offer, then payment of the deposit Is just one step to be done to carry out the contract. And in that case the fact that the deposit is not paid would not mean there is no binding contract.

The fact that you did not have certain information about the car, financing, or receive a copy of the offer would not necessarily mean there is no binding contract. If you sign the paperwork and it clearly states that you agree to purchase the vehicle, then there would be a binding contract and you could be sued on that, even if you have not yet received all information regarding your purchase.

Hi, We live in Calgary, Alberta and signed an offer to purchase…

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