I put down a deposit on a vehicle and then decide not to buy it. They issued me a receipt but I never signed anything. Can I get my deposit back in SC

[Ed3909]

Jurisdiction

South Carolina

As the title says, I was going to purchase a truck from a small dealership in SC. I asked if I could give them a deposit to hold it until I could go to the bank the next day and get the rest of the money. The sales rep told me they would do it if I gave him half of the money at that time and the rest tomorrow. I gave him the deposit and he issued me a receipt. No contracts were signed by me. He also never informed me the deposit was non-refundable. The next day I called at 4:30 and informed him that I was no longer interested in the truck and if I could get my deposit back. He told me I could and to stop by the next day and he would have my money ready for me. At 10:44pm I received a notification that the truck had been sold. I arrive to the car lot the next day and I am greeted by his boss. He becomes aggressive and tells me all deposits are non-refundable. I told him nothing was ever told to me and he points to a hand written sign on the wall that is conveniently dated one year ago. I told him the rep told me I could get the deposit back. He said the rep did not have the last say. He said since I could either give him the rest of the money and take the truck or I would lose my deposit amount. He said he could not give me my deposit back because they had already marked it as sold and they had potentially lost money. I told him I informed them within a reasonable timeframe and the truck was marked sold after I told them. He said that because I had given them money, I was now in a legally binding contract. He also told me I could have put a deposit down of just $100; and if I would have done that, I wouldn't have been upset about getting the deposit back. Am I now out of luck?

 

[army judge]

Am I now out of luck?

Magic Eight Ball reveals your assumption is correct.

 

[Tax Counsel]

You did have a contract with the dealership, though it was a verbal one rather than written. Your deposit receipt would be evidence of that agreement. But there are several problems here. The first one is that under South Carolina law, as in most states, a contract for the purchase of goods (which includes a car) for more than $500 must be in writing and signed by the person you want to sue (the dealership, in this case). The receipt you were given, if signed by someone who has the apprent authority to sign contracts, might be enough for that. That will depend a great deal on exactly what that receipt says and how the SC courts have interpreted that rule.

If the contract was enforceable, the terms apparently were that you were to put down half the price to hold the vehicle and return the next day, pay the rest, and you get your car. Nothing was apparently said about refunds. The rule on no refunds was, at least per the dealer's claims, posted in the office and had been there at least a year. If the sign was put in a place customers are likely to see it, that might be enough for the no refund term to be in the contract. The problem for the dealer is that the ordinary understanding of refunds is that the customer returns the purchased goods and gets back what he or she paid for it. So I think most people would think the sign meant once they bought it, the vehicle was theirs and they can't give it back and get a refund. You never got the vehicle, though. The dealer kept it and was able to promptly sell it after you said you didn't want and someone at the dealership verbally agreed to give you a refund. Your cancellation of the deal is likely a breach of the contract. But that doesn't mean the dealership gets to keep all that money, something the dealer may not be familiar with. When you breach the contract, what the other party is entitled to get in most contract disputes like this is what that party would have received if the contract was carried out.

For the dealer, what he would have had in profit from the sale is likely the most he could get, but that's going to be limited further by what the other buyer paid. If the other buyer paid at least as much as you agreed to pay, the dealer hasn't lost any money on that vehicle and you should get all your deposit back. It may take filing a lawsuit to get it. If the money at issue is within the limit of small claims court, you can sue the dealer and the rules are simple enough that you don't need a lawyer. But you will need to make sure the judge clearly understands the facts; there was a lot going on in this deal and the details matter. If the amount of your deposit is high enough to make it worthwhile paying a local litigation lawyer to write a letter to the dealership explaining the law and demanding the refund might get you back your money.

 

[zddoodah]

He also never informed me the deposit was non-refundable.

Under the circumstances described, what would be the point of you giving the deposit if it were refundable? You wrote that you gave the deposit in exchange for the seller's agreement to "hold" the vehicle (i.e., an agreement not to sell it to someone else). If the deposit were refundable, then you'd have received something (the dealer refraining from selling it to someone else) FOR NOTHING. And, if that were the deal, what would be the point of you giving a deposit at all? Also, did YOU say at the time you gave the deposit that you expected it to be refunded if you changed your mind?

At 10:44pm I received a notification that the truck had been sold.

Presumably because you had informed the seller that you were no longer interested in it.

he points to a hand written sign on the wall that is conveniently dated one year ago.

Why is that "convenient"?

The first one is that under South Carolina law, as in most states, a contract for the purchase of goods (which includes a car) for more than $500 must be in writing and signed by the person you want to sue (the dealership, in this case).

The highlighted isn't correct. The law says that it has to be signed "by the party to be charged," which means it has to be signed by the party against whom the contract is sought to be enforced - in this case, the OP.

The issue, though, is that the contract wasn't for the purchase of goods. The contract was an agreement to refrain from the sale of goods - i.e., in exchange for $X paid by the OP, the dealer agreed not to sell the vehicle to someone else. I don't know if the UCC statute of frauds would apply to such an agreement. Moreover, the OP received the benefit of the bargain. In exchange for the money paid by the OP, the dealer did, in fact, refrain from selling the vehicle to someone else. In other word, it was a fully-performed agreement with consideration given by both parties.

To the OP: How much $$ is at issue?

 

[Tax Counsel]

The issue, though, is that the contract wasn't for the purchase of goods. The contract was an agreement to refrain from the sale of goods - i.e., in exchange for $X paid by the OP, the dealer agreed not to sell the vehicle to someone else.

I don't agree with that. But that's because I view it, with the facts we have so far, differently. The deal was not simply a purchase option, which what you are describing. Rather it seems to me, just given the facts the OP has provided, that it was clear to both parties that the ultimate objective of the contract was that the OP was entering into a contract to buy the car and the money given the dealer was a deposit to give the OP time to come up with the rest of the price. In short, I see it as a timing of payment issue, not as an issue regarding whether it was a purchase of goods contract.

But neither of us has actually seen the reciept or all of the evidence that's out there, so which is correct will depend on any additional evidence and how the person(s) deciding the verdict looks at the deal: was it more like an option, as you describe, or a contract for the sales of goods subject to the UCC statute of frauds rule, which is my take on it. Or it may come down to another issue: regardless of the type of contract, was one of its terms that the deposit was not refundable as the dealer claims and is that enforceable under whatever consumer rights laws SC has (which I suspect doesn't provide a whole lot of protection as the southern states in general are not all that consumer friendly).

Depending on all the rest of the details, this is the kind of thing I could see a law professor creating as a question in a contracts exam.

 

[Ed3909]

I gave the dealership $9,000 while I gathered the rest of the money. The receipt they gave me does not say anywhere that it is non-refundable. When I got the receipt they asked me to write my name on it because it is difficult to spell. The owner is now telling me that it counts as my signature; even though I told him it was not even close to being a signature. He says it is my signature because I wrote it and they don't teach cursive in school anymore. The sign is dated to exactly one year prior to me asking for my deposit back. I told the dealer the truth about me not wanting the truck because of some issues with the braking system that make me feel concerned for my safety. Along with the truck having illegal emissions modifications that I could get penalized for. The owner then told me if I didn't want it, I could turn around and sell it to someone else; which is something I am not comfortable doing. He told me I have three options. 1. Give him the rest of the money and then sell the truck. 2. Pick out another vehicle on the lot. 3. Forget about the money I gave to them.

 

[zddoodah]

He told me I have three options. 1. Give him the rest of the money and then sell the truck. 2. Pick out another vehicle on the lot. 3. Forget about the money I gave to them.

I don't entirely understand #1. In your original post, you told us that the seller sold the truck to someone else (or did I mis-read that?). In any event, option #3 is really: EITHER forget about the money or sue the dealer. Unfortunately, it appears that the most you can sue for in small claims court in SC is $7,500, so you'd have to make a choice either to sue in regular court or to sue in small claims court and waive anything in excess of $7,500.

 

[Ed3909]

In your original post, you told us that the seller sold the truck to someone else (or did I mis-read that?).

I may have miss worded it. I informed the dealership my intention to not purchase the vehicle anymore at 4:30pm. The sales rep (who I have found out it is owners son and is also an owner) tells me to go pick up the money the next day. At 10:44pm, I receive a notification that the truck is now marked as sold. I arrive to the dealership the next day and the sales rep tells me he can't do anything and to talk to the owner. The owner tells me he will not give me my deposit back and that I have to pay him the remaining amount, pick another vehicle, or lose my deposit. Reason being that they already marked the truck as sold and don't want potential buyers to be curious as to why the truck was listed again after being marked sold. Hope that makes more sense. Sorry.

 

[Tax Counsel]

Reason being that they already marked the truck as sold and don't want potential buyers to be curious as to why the truck was listed again after being marked sold.

That doesn't have much effect on the legal outcome, but that explanation strikes me as pretty weak. It wouldn't be hard at all to explain to prospective customers that the previous buyer bailed on the deal. Used car dealers in particular are used to that happening.