19 July 2011 #Dispute Resolution
When purchasing a car, consumers want their new vehicle as soon as possible. If you look at any internet car forum or motoring magazine these days, it is not uncommon to find complaints about the late delivery of new vehicles and enquiries about what legal action consumers can take.
The two main options are: (i) terminating the contract and refusing to take delivery of the new vehicle when it is ready, and/or (ii) seeking compensation.
Typically, sale contracts used by retailers do not allow the purchaser to terminate straightaway due to late delivery of the vehicle. The contract would have to specifically state that time for delivery was "of the essence" or words to that effect for the consumer to have an immediate right to terminate. For obvious reasons, retailers do not include this term in their sale contracts and often will say exactly the opposite. Merely including a date for delivery in the agreement does not automatically make time of the essence.
In cases where the sale contract does not make time for delivery "of the essence", a consumer who has been subjected to unreasonable delay may be able to impose a deadline for delivery by serving notice on the retailer. If that deadline is missed, the consumer may then be able to terminate the contract, demand a refund of the deposit and seek compensation. It should be noted however that some legal commentators disagree with this view, so dealers should always take specific legal advice if served with or relying upon such a notice.
In some cases, compensation claims may be substantial where, for example, the consumer has to pay more to buy the same vehicle from another retailer. Even in cases where the compensation claim is low value, the dealer will still have lost the profit they would have made on the transaction and no doubt have sent the customer in the direction of one of their competitors.
In cases where the right to terminate has not arisen, the customer cannot withdraw from the agreement and remains liable to pay the agreed purchase price. They may still be entitled, however, to claim compensation from the dealer for late delivery.
If the contract does not state a date for delivery, English law provides that the vehicle should be delivered by the seller within a reasonable time. What is "reasonable" will depend on the facts of each case. It is arguable, however, that a longer period for delivery may be regarded as reasonable in the case of a hand built, supercar, than in the case of a mass produced, family hatchback.
Most dealers will already have comprehensive Terms and Conditions in place that deal with late delivery. Dealers should note however that the late delivery of goods has been recognised as a major source of consumer discord and that the law in this area may be tightened. In the meantime, dealers would be wise not to commit to unrealistic delivery dates.