Car dealer canceled deal

This is in NJ.

I went to car dealer, found a used car that I liked, negotiated a price, signed a contract, and left a deposit.

I went back to the car dealer the next day to take delivery of the car. The dealer presented me with an arbitration agreement. I refused to sign the agreement. The dealer refused to sell me the car. The dealer said that they would cancel the deal and refund my deposit.

At the point where I sign a contract and the dealer accepts my deposit, are they obligated to complete the sale? Would I have a leg to stand on if I called them on Monday and insisted that they complete the transaction? Would I have a valid reason to pursue the dealership for damages if they did not complete the transaction?

Depends on what your contract says.

OHRoadwarrior said:

Depends on what your contract says.

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The dealer did not provide me with a copy of the contract. That was my mistake.

jjoshua said:

The dealer did not provide me with a copy of the contract. That was my mistake.

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Then I would suggest you get your money back. You don't have a signed contract.

Zigner said:

Then I would suggest you get your money back. You don't have a signed contract.

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Of course there was a signed contract. They took my deposit which they wouldn't do without a signed contract. I guess that I need to get them to send me a copy...

jjoshua said:

Of course there was a signed contract. They took my deposit which they wouldn't do without a signed contract. I guess that I need to get them to send me a copy...

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That would be a start. I would not hold my breath unless it already says they are correct.

I have a copy of the contract

The dealer was nice enough to send their copy of the canceled contract.

The contract says that "the order shall not become binding until accepted by dealer or his authorized representative."

Does accepting my deposit count as being accepted?

Zigner said:

Then I would suggest you get your money back. You don't have a signed contract.

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There is one tiny detail. You never took delivery of the vehicle. Consideration was never complete.

Take you money and say thank you.

Again, go get your money back.

Zigner said:

Again, go get your money back.

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I did get my money back.

The problem is that they agreed to a sale, took my deposit, and then they canceled the deal because I didn't agree to an arbitration clause.

My contract says that the order is not subject to cancellation. Did they breach the contract?

jjoshua said:

I did get my money back.

The problem is that they agreed to a sale, took my deposit, and then they canceled the deal because I didn't agree to an arbitration clause.

My contract says that the order is not subject to cancellation. Did they breach the contract?

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No, the contract was not completed. You did not take delivery. Had you taken delivery, we'd have a different answer.

Just so I understand...

A binding sales contract, where a deposit is given, does not obligate the dealer to deliver the vehicle?

jjoshua said:

Just so I understand...

A binding sales contract, where a deposit is given, does not obligate the dealer to deliver the vehicle?

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You're taking a leap. You didn't have a binding contract.

jjoshua said:

Did they breach the contract?

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Yup. They breached. So you are entitled to sue for rescission or expectancy damages. For a fungible item like an automobile, a court is unlikely to award specific performance (where they make the dealer follow through with the contract) when damages are so easy to calculate.

Expectancy damages will place you in the financial position you would be in if you had the benefit of the bargain. Those damages would be the difference between the fair market value of the automobile and what the dealer agreed to sell it for. An argument can be made that agreed upon price is the fair market value, so the difference would be zero.

The other option is rescission, where the court places you back in the position you were before the deal was made. In this case, the court would make the dealer pay you the difference between the amount previously refunded and the full amount you paid. Since you already received a full refund, that amount would also be zero.

So the likely outcome is that you sue, and win on the liability issue and are awarded zero as damages.

jjoshua said:

Just so I understand...

A binding sales contract, where a deposit is given, does not obligate the dealer to deliver the vehicle?

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Consideration (delivery of the vehicle) would have completed the contract.