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TexLaw, Attorney
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Who should pay for the loss in value of the car Im selling? Im

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Who should pay for the loss in value of the car I'm selling?

I'm about to sell my classic car - a 1967 Mercury Cougar - as a restoration project. The car runs (or it did prior to the incident I'm about to relate), but it needs a lot of work. I plan to sell it "as is," and a very rough estimate of its value would be $1200-4200.

I don't know much about cars, so I contacted a friend and asked if he'd help me write an ad for it. Upon hearing I was going to sell the car, "Mark" said he wanted to buy it himself. So I got the pink slip, and we drove to Mark's insurance company, who takes care of the DMV paperwork for their customers. Mark drove the Cougar, and I drove another car. We weren't able to complete the sale that day, because there was an issue that required me to go to the DMV before selling the car. It was too late for the DMV that day, so I drove home, and Mark drove the Cougar to his house.

It turned out that Mark couldn't keep the Cougar at his house, so a few days later, he found an inexpensive storage facility for it. I wasn't with him when he drove from his house to the storage facility (about 10 miles), but apparently something went wrong, and he ended up having to get it towed. Now he says the engine is likely to catch on fire if the car is driven at ALL. I don't know if the problem was caused by Mark or not, but he had previously ignored my warning that driving faster than 50 mph would cause the car to quickly overheat, and I think that's what happened.

It's become clear that Mark no longer wants to buy the car. He has some valid reasons - restoration will cost a lot, he doesn't need another project right now, etc etc. We've also had a bit of a falling out, over an unrelated issue, so any desire to buy it to "help me out" no longer exists. I understand all that, and I'm not going to try to hold him to the oral contract we had (although I do feel we had one) for him to buy the car. After our falling out, he mailed me the storage facility contract, and told me he didn't want the car, and I need to take over payments, and that was it.

When Mark drove this car away from my home, it was with the intention of buying it that day. Now, I'm stuck trying to sell a non-running car, from a storage yard. Mark's not going to help me write the ad or sell the car; and until I do sell it, I'm stuck paying storage I can't afford, since I can't even drive it home.

Before our falling out, I think Mark felt bad about backing out of the sale. He probably would have felt obliged to fix the damage that occured under his care, or to compensate me for the loss in value. Now that he feels no moral obligation towards me, I'm wondering: does he have a legal one? I really don't want to take him to small claims court over this, but would I have a case if I did?

Zachary D. Norris :


Zachary D. Norris :

I'd be happy to answer your questions.

Zachary D. Norris :

Are you there?

Customer: replied 5 years ago.
Hi, yes, I'm here.
You have several claims you could make against Mark to recoup the repair costs or diminished value of your vehicle. First of all, you have reliance damages based on his breach of the oral contract to sale. That means, as you have previously identified, that he took the vehicle under the oral contract for purchase as is. You relied on that promise and now are damaged in the amount of the repairs and storage costs.

Second, you have a claim in negligence against Mark for the repair and storage costs. When he took the vehicle from you, he had a duty to take good care of it while it was in his possession before the purchase was completed. You specifically told him to not drive the vehicle over 50 mph. You suspect that he did this anyway. Thus, he was negligent in that he did not return the car to you in the same condition as he took it.

You can sue for both of these at the same time, and then pick which one you want to recover under after you prove your case in court. With both of these claims, you have a duty to mitigate your damages. In this case, there is the possibility that someone might ask why you don't have the car towed back to your location instead of leaving it at the storage facility. If the cost of towing is less than the cost of storage, you could see your damages for recovery of the storage expenses limited to the reasonable cost of towing. Also, you will have to have either performed the repairs already and submit the bills, or have a mechanic who is willing to give you an estimate (for small claims) or an affidavit of his opinion on the costs (for higher courts).

Please let me know if you have any further questions.
Customer: replied 5 years ago.
Thanks for the quick and thorough answer! To address a couple of the points you made:

1. I'm not even just speculating about him driving the car too fast. When we drove to his insurance company, I was following him. Even though we'd just agreed to take back roads, he got on the freeway, and went too fast for the car. At the time, I didn't say much, since he was in the process of buying the car, and since I figured he knew what he was doing. Even after the car was damaged, and at the storage facility, there was no talk of him not buying the car, so I didn't say much about whether or not he was at fault.

2. He took the car to the storage facility, and had it sit there for months because he planned to buy it, and was told he couldn't have it at his house. It really had nothing to do with the sale, or with the problem he encountered in driving it.

3. Until our falling out, Mark had never told me he wasn't going to buy the car from me. So the reason there was no talk of having it towed to my house was because we were both behaving as if the car was his, and that the paperwork (and money) was a technicality to be dealt with whenever.

4. It was only this month that he told me that he didn't want the car after all, and wouldn't pay for storage anymore. The fee is paid through the end of the month, so I still have the option of towing it to my house. However, because of the distance, and the need to use flatbed towing, I anticipate the cost of that would be equivalent to at least two months storage.
In response to your points.

1. The fact that you did not say anything about him driving faster than you told him was advisable does not waive your claim.

2. The fact that he chose to put the car at the storage facility rather than returning it to you weighs more in your favor.

3. From the point where you learned that he was not going to buy the car, that is when you start measuring whether the storage would be more than towing. Prior to that, he would be responsible for all of the storage fees.

4. While the towing is worth 2 months storage, you are probably going to have to tow it eventually anyway, so why not save the storage fees in the long run and tow it to your place.

I think you have a case. It's obvious that he treated you unfairly.
Customer: replied 5 years ago.
I sent another reply I don't see here now, but I think you mostly covered it... I guess I just have to decide if I should get the car fixed prior to selling it, or sell it as is for a lower amount. If I understand you, I really need to take it to a mechanic either way -- either for an estimate, or for repair. The estimate route is cheaper up front, but I really don't know how much this damage devalues the car to a potential buyer. Is one way or the other (repair vs estimate) better, in terms of trying to recoup my costs if I do have to go to court?

Another potential problem I anticipate is: how can I ensure that the mechanic fixes (or estimates) only the new problem? The car did already have this overheating problem... will it be important for me to make sure the mechanic doesn't fix the car "too much," but leaves the car with an overheating problem? (does that make sense?) I could imagine Mark making the claim that I'm trying to charge him for work the car already needed, but that he just exacerbated...

The other possible issue is that if Marc had bought the car, or if he'd remained a nice person through our falling out, he'd have probably done this work himself. Am I obligated to let him try to correct the problem himself?

Sorry for all the follow ups - this will be the end of it, I promise! (for you, anyway - not me - ugh) I will definitely rate you as having given excellent service. Thank you so much.
The damages that you can recover will be either the diminished value or the repair costs (in addition to the storage/towing fees you have).

As far as what the repair costs are, you had a running vehicle before he drove it, and that is what you should have now. So you can only claim the repair costs of what it would take to get the vehicle running again. Mark took the risk of having to pay for this when he took possession of the car and led you on as to his intention to purchase it.

A repair bill is always better than an estimate, because it is proof that you have actually lost the money, as opposed to the speculative nature of an estimate.

You are not obligated to let him attempt to repair the car himself.

All that being the case, you can forego the repairs and simply sale the vehicle. Then you can recover the difference between the price you got and the price that Mark agreed to as the proven diminished value of the vehicle and the expectation damages on the oral contract.

So you have several options of how to proceed legally to sum up.

1. Repair the vehicle and seek cost of repair

2. Get an estimate on the repair and seek the value of the estimate.

3. Sale the vehicle and get the difference between what it sold and the price Mark agreed to pay.

Plus the storage/towing expenses. Good luck in your recovery.

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