Steering You Right: A contract made in error

By Jordan W. Charness

If you read all the ads in the paper, now would seem to be an excellent time to buy a new car. The deals are amazing; financing has never been lower; there are still a few of last year’s models out there at terrific prices. Even the introductory deals for the new season seem too good to pass up. At least, that’s the way that Peter felt.

Although their old minivan was still pretty serviceable, it had safely born them several thousand kilometres and was starting to seem tired. Peter decided that it would be better to trade it in while it had a reasonable value rather than wait until he drove it into the ground. He figured that at this time he could probably get about four or five thousand dollars for it and this would make the price of a new minivan even more attractive.

Peter also noticed that different dealers seem to offer the exact same new vehicle at slightly different prices. He also looked at the option of buying a demonstrator, which is an extremely low mileage vehicle that was used only as a salesperson’s or sales manager’s private vehicle for a few months, or was used as a test vehicle for potential customers.

Although demonstrators are technically used cars, for the purpose of the sales contract they are considered to be similar to new cars and benefit from a new car warranty. Peter found just the minivan he was looking for and struck what he thought was an excellent deal because it also happened to be a demonstrator vehicle.

Peter spent about an hour and a half negotiating a deal with the salesperson and signed a contract to purchase the vehicle. The contract itself was not fully detailed but clearly identified which minivan Peter was buying and contained a clause that read, “purchase of vehicle, 60 months at $426 per month taxes included.”

The contract did not contain the purchase price or the list of options but was certainly clear enough for both parties to understand that a specific car had been sold for a specific price. Peter was told to come back on Friday to pick up his new car.

Peter left the registration papers for his old minivan with the dealership so that they could prepare the transfer documents. In this way he could leave the dealership on Friday, leaving his old car behind and get behind the wheel of a brand-new minivan.