NSW Back Out of Private Car Sale - Letter of Demand from Customer?

[neil67]

I am in NSW and recently advertised my car for sale on car sales. I had many interstate people and nothing until last Sunday, I had a guy coming up from Sydney to view the car. I hadn't heard anything from him and was waiting. Now I'm not sure he would turn up.

Whilst waiting, I received a phone call from a buyer who showed interest earlier in the week and stated he wanted to purchase full, asking over the phone. Told them I had a guy coming up and he stated he would put the deposit on the car via The Internet. Guy turned up and put the cash deposit down there and then the deal was done, as no money was received via The Internet. He didn't turn up until Monday this week.

I had stressful night as I wasn't sure the other guy in Victoria had sent money and didn't feel comfortable doing business with him. I was scared it was a scam as he hadn't personally viewed the car or followed up our initial conversation on Wednesday.

On Monday morning, I told a lie to the guy in Victoria that car was stolen and couldn't sell the car to him and would like his banking details to immediately reimburse his monies. His deposit subsequently came into my bank account and I spoke to him in the afternoon continuing the said lie and he was happy to receive the refund. Later, he asks me for police report which I declined.

The next day, I got a solicitor's letter of demand, demanding I complete the sale and he has registered interest in car on PPSR

Where do I stand under Australian Consumer Law?

 

[Sophea]

The basis for any legal action this guy may be taking would be a breach of contract if a contract existed. Whether or not a verbal contract existed at the point when you took the cash deposit off the other guy is what needs to be determined. That is for a court to decide based on what was said between you and whether promises were made to hold the car, or whether you stated something to the effect that if the deposit is not received by X time then you will sell the car to the next buyer that comes along. More information is required to determine if a contract existed between you and you breached that contract.

In addition, the remedy that he is seeking is an essentially specific performance which requires the party who breached the contract to fulfil it - not just pay compensation for any loss the innocent party has suffered. Legally if a person can be adequately compensated by damages for a breach of contract then the court cannot order specific performance of the contract. In this case, (to our knowledge) the VIC buyer suffered no financial loss as a result of not getting the car, but he could have potentially missed out on that specific car. Was the car unique at all?

Also, the court is unlikely to specifically enforce contracts in which the parties obligations are imprecisely defined because non-compliance with an order for specific performance is punishable as a contempt of court. Therefore, if the terms of the verbal contract were somewhat vague you may be able to argue that specific performance is inappropriate in this case.

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