New caravan Contract

jingle · Newbie

New caravan Contract

lizard · Veteran Member

Get your financier (bank etc) to refuse your loan

rockylizard · Guru

Gday...

Firstly, welcome to the forum, jingle.

I guess the only advice I could offer, is to carefully read the contract.

Is there a clause that addresses the circumstances of either party not wanting, or able, to continue with the contract?
Is there a firm date, time period, for the vendor to provide/complete the van?
Is the fact that the van appears to not have been started to be built going to 'violate' that condition?
Is there any penalty for not providing the van within that timeframe?

If it is a 'standard' contract, I would be fairly certain that it would be covered there somewhere - even if it is only a clause that 'protects' the vendor by applying a penalty if the buyer withdraws prematurely. hmm

Cheers - John

The Belmont Bear · Guru

Hi Jingle, I went through exactly the same scenario only 12 months ago I had signed a contact to purchase a motorhome and just after that was given an early retirement surprise. I met with the owner of the dealership and explained that I had a sudden change in my financial situation and as the contract was only a few days old would it be possible to cancel the order. Although sympathetic he wouldn't agree to return all of my deposit but said he would keep it in trust and if circumstances changed he would take it off the price of whatever I ordered - it ended up costing me $9K (5%) for this experience. The way I looked at it was that it was better to pay this penalty and cancel the order than being committed to paying out a another $170K when the vehicle was delivered. If you appeal to the dealership and explain your changed circumstances they might let you out of your contract but don't hold your breath it could also cost you 5% of the purchase price which they are supposed to explain very clearly before you sign on the dotted line...

In my opinion if you are going to be under financial pressure to pay for the van on delivery it may be better to suffer a little now rather than having to struggle a lot later. Maybe you could seek some legal advice but I didn't bother as I knew I was going to be up for a cancellation penalty. I don't know how lizards idea would work seeing that you have already paid your deposit but I guess you can try every possible avenue - good luck I know the sick feeling you get in your gut when something like this happens, I wish you the best with whatever you decide to do.

montie · Guru

jingle wrote:
Hi, I am hoping that someone maybe be able to give some advice on if there is a possibility to rescind on a contract to buy a new caravan. We have paid a deposit and ordered the van but it has not been started yet. I have just lost a whole bunch of hours we I work and the new van is going to put us under some financial stress. Has anybody ever had this problem and what advice can you give me. Cheers jingle

Jingle,

I notice from your profile that you are in Qld.

The industry body in Qld provide contracts to dealers so I'm guessing they will all be the same.

There is a default clause in your contract (SC11) which provides a) Forfeit and retain any monies paid by the buyer on account of the total balance to a limit of 10% of the total balance.b) Recover from the buyer all loss of profit and reasonable expenses.

Dealers have different policies on contract default and they usually settle for retention of your deposit should you default, however, that is just my opinion and the dealer you ordered the van from may have different policies.

My advice would be for you to contact the dealer and explain your circumstances and ask if he will let you out of the contract.

If he has already ordered the van from the manufacturer he will be committed just as you are. Van manufacturers take a dim view of order cancellations so he will need to find another buyer for it.

Speaking for ourselves in these circumstances we would want $5000 compensation and when your van came through we would reoffer it for sale. I am not a solicitor so I am not offering legal advice.

Montie

montie · Guru

lizard wrote:
Get your financier (bank etc) to refuse your loan

This will only work if the contract is "Subject to Finance".

Montie

DMaxer · Guru

Just take your contract and yourself along to your local solicitor. He/she will give you proper advice and then he/she will correspond with the dealer. There is a reason why it takes five years to obtain a qualification in law. So many unqualified experts giving legal advice!

montie · Guru

DMaxer wrote:
Just take your contract and yourself along to your local solicitor. He/she will give you proper advice and then he/she will correspond with the dealer. There is a reason why it takes five years to obtain a qualification in law. So many unqualified experts giving legal advice!

Why would you do that without first talking to the dealer. He might agree to release you from all obligations and refund your deposit.

Sending a solicitor's letter at this early stage will simply get the dealers back up and make any sort of mutual settlement very difficult.

If the dealer get's a solicitors letter he will simply pass it all to his solicitor and away we go, that will be the end the possibility of any mutual agreement.

Don't be too quick to go running to your solicitor just yet. See what the dealer has to say first and then weigh up if it's worth while involving your solicitor.

Montie

-- Edited by montie on Monday 28th of November 2016 12:32:10 PM

brickies · Guru

I was park alongside a person in a caravan park last year who tried to cancel a contract on a new caravan , Went and seen a lawyer who read the contract and found that they should have had a lawyer look at the contract before they sign it. The short story they must take the caravan they order if not they the builder would sell the caravan for what ever price and they would have to pay the difference . Buyer beware .

DMaxer · Guru

Before one negotiates, one needs to be sure of one's legal position. Imagine doing a deal only to find out you had short changed yourself. But then, what would I know!

montie · Guru

DMaxer wrote:
Before one negotiates, one needs to be sure of one's legal position. Imagine doing a deal only to find out you had short changed yourself. But then, what would I know!

DMaxer,

If it were us we would release him from the contract for a $5000 charge if he made a direct approach to us and gave us the circumstances.

If we received a solicitors letter from him without any consultation we would instruct our solicitor to enforce the full default clause. That is 10% of contract price plus loss of profit.

I can only offer the advice.....the rest is up to the OP.

Montie

Dougwe · Chief one feather

Welcome to the gang Jingle, enjoy here and out in the playground.

As I am not a legal eagle I will keep out of that side of things but just wanted to say welcome. I hope all goes well in your favour though.

Keep Safe on the roads and out there.

the rocket · Guru

Hi jingle, welcome. I feel for you. Life sometimes throws u curve balls, lets hope u can duck this one. Good luck

DMaxer · Guru

Montie, I think you are getting confused with contacts relating to real property (real estate) and contracts relating to purchase of goods. There is no standard 10 per cent and loss of profit in sale of goods. Trust me, I am lawyer !

montie · Guru

DMaxer wrote:
Montie, I think you are getting confused with contacts relating to real property (real estate) and contracts relating to purchase of goods. There is no standard 10 per cent and loss of profit in sale of goods. Trust me, I am lawyer !

Dmaxer,

Sorry to rain on your parade but the caravan sale contract has been around for many years and during that time has been well and truly tested in the courts.......fortunately not by ourselves.

Clause SC11 covers it comprehensively.

Probably not what a solicitor wants to hear but we are always in favour of a mutually negotiated settlement......saves an awfull lot of money for both parties.

Montie

jingle · Newbie

Thankyou everybody for your comments, I will speak to the dealer and then go from there, I am sure that this has happened to other purchasers and I guess it will be determined on the day. Lets hope that they are compassionate about our situation.

montie · Guru

jingle wrote:
Thankyou everybody for your comments, I will speak to the dealer and then go from there, I am sure that this has happened to other purchasers and I guess it will be determined on the day. Lets hope that they are compassionate about our situation.

Jan

I wouldn't worry too much......I think the worst than can happen is you might lose your deposit.

Rest assured they cannot legally force you to take delivery.

Good luck and let us know how you go.

Montie

DMaxer · Guru

Montie, just because something is written in an industry created contract does not necessarily mean it is enforceable. Why did I waste five years at university when I only needed to join a forum and read the writings of all the know it all to understand the practice of law and contractual obligations. For your edification Montie, litigation is a last resort if for no other reason if there is no attempt at negotiating it affects your right to claim costs. But then, like everything else, you would know that.

brickies · Guru

Best to visit a lawyer before you get into trouble , Bush lawyer can get you into trouble .

Bryan · Guru

DMaxer wrote:
Montie, just because something is written in an industry created contract does not necessarily mean it is enforceable. Why did I waste five years at university when I only needed to join a forum and read the writings of all the know it all to understand the practice of law and contractual obligations. For your edification Montie, litigation is a last resort if for no other reason if there is no attempt at negotiating it affects your right to claim costs. But then, like everything else, you would know that.

Absolutely correct.

montie · Guru

DMaxer wrote:
Montie, just because something is written in an industry created contract does not necessarily mean it is enforceable. Why did I waste five years at university when I only needed to join a forum and read the writings of all the know it all to understand the practice of law and contractual obligations. For your edification Montie, litigation is a last resort if for no other reason if there is no attempt at negotiating it affects your right to claim costs. But then, like everything else, you would know that.

Bryan/DMaxer,

I really don't want to argue about all this, I've only been doing it for 35 years.

However, I will clarify a few things for your edification. In Queensland RV and Motor Dealers are governed by the Property Agents and Motor Dealers Act (PAMD) as amended from time to time. I suggest you google it and have a good read.

There is very little difference between a Motor Dealers sales contract and an RV dealers contract, the main one being that RV dealers are not legally obliged to offer a Cooling Off Period on a caravan or RV where a motor dealers must do so on a motor vehicle. RV dealers are not required to offer a statutory warranty on used RV's either, which, as you would know is irrelevant since the introduction of the Consumer Act.

Both contracts have more or less the same default clauses and I have seen them enforced numerous times over the years in the courts.

Now having said all that, in real life, we dealers (or most of us) would never contemplate enforcing SC11 unless we had no alternative. The real life scenario is usually a call from the buyer wanting out of the contract, the dealer explaining that they will lose their deposit (in our case to a max of $5000) and it usually ends there. Occasionally, the buyer will get the advice of their solicitor who duly explains the contract terms to them and it ends there after he has charged them $400 per hour.

There are rare cases where we will refund a deposit in full based on compassionate grounds.

Now Bryan/DMaxer, I'm sure when you studied you would, like I did, have swatted through that grey cover publication called "Business Law of Australia" and contract law is pretty well covered in there.

Finally, if you have an issue with a dealer, whether it be a contract, warranty or delivery, you will always increase you chances of an amicable conclusion if your first port of call is the dealer. If a resolution cannot be achieved, then, as last resort visit your solicitor and if necessary issue proceedings if you think you can win. Unfortunately over the years, when it comes to litigation, I have found there is usually only one winner....the solicitors and barristers.

Montie

-- Edited by montie on Tuesday 29th of November 2016 11:11:24 AM

-- Edited by montie on Tuesday 29th of November 2016 11:14:31 AM

-- Edited by montie on Tuesday 29th of November 2016 12:45:51 PM

DMaxer · Guru

Legal advice from a car salesman.

montie · Guru

DMaxer wrote:
Legal advice from a car salesman.

Common sense advice (misguided) from a solicitor!

Happy Christmas DMaxer......you've got some work to do!

Montie

-- Edited by montie on Tuesday 29th of November 2016 07:46:39 PM

brickies · Guru

Well there we have it to sides to the coin , It all boil down to fair and just and works both ways .

meetoo · Guru

I imagine that someone would usually have a good reason to have to cancel a contract on a new van, as in the case with jingle, he has lost a whole bunch of hours where he will be under some financial stress. I agree it is reasonable for a dealer to recover any out of pocket costs, but to pocket the deposit as well, because you can, is a blatant ripoff especially as the contract is only in early days and the build has not even started.

My opinion - not an argument!!!!!!

Cheers, John.

montie · Guru

meetoo wrote:
I imagine that someone would usually have a good reason to have to cancel a contract on a new van, as in the case with jingle, he has lost a whole bunch of hours where he will be under some financial stress. I agree it is reasonable for a dealer to recover any out of pocket costs, but to pocket the deposit as well, because you can, is a blatant ripoff especially as the contract is only in early days and the build has not even started.
My opinion - not an argument!!!!!!
Cheers, John.

John, that is a valid point of view, however, once a dealer places an order for a new build from a manufacturer it is irrevocable, that is part of his dealer agreement. So when that van is completed he must pay for it and put it on his lot for sale again which could take some time, especially if there were any customised changes made.

In the case of higher price full custom built vans dealers/manufacturers will be looking for $10000/15000 deposit, because in the event of a default they could be left with a very expensive customised van that might have to be discounted heavily to resell.

It costs a dealer approx $2500 in floor plan (finance) charges to hold a $50000 van for 6 months.

On the other hand if the cancelled order involved a popular easy to sell layout then the dealer might take a different view.

Nothing is black and white and I hope everything works out ok for Jingle.

Montie

-- Edited by montie on Wednesday 30th of November 2016 06:28:05 AM

meetoo · Guru

Montie, thanks for that insight. I am still of the same opinion though, as you say, nothing is black and white.

Good luck to you jingle, hope you can recover your hours and proceed with the van and your dreams.

Cheers, John.

gold dandelion · Senior Member

gees I've missed this.

Tony Bev · Guru

Hello Jingles

I hope that I am not too late to welcome you to the forum

Sorry that I have no legal expertise to offer you, but I hope that you have a good outcome

Hylife · Guru

Not a legal eagle but having been through something similar (caught up in the moment to buy a fancy new caravan) I can advise that almost all industry contracts aren't worth the paper they are written on because they are all in favour of the dealer.

Thankfully, at law, terms and conditions in contracts must provide equal protection to both parties.

If the contract, as deemed by a judge, is seen to be one-sided he/she can strike out the entire contract and/or force the dealer to justify their true out of pocket expenses which would then be deducted from the refund of the entire deposit.
Loss of profit is not a cost most judges will consider in such simple matters as a deposit refund for a caravan that has not yet been constructed.

You don't have to send some nasty letter of demand to a dealer as the first action, but if you know your rights you have a far better possibility of an outcome that is positive to all parties, both you and the dealer.
Recommend you definitely visit a lawyer first and take that contract with you, asap.
With a head full of reputable legal advice you can then decide on what course of action you want to take.

He said/she said well meaning advice from this forum is NOT what you need right now.