Under what conditions is acar salesman entitled to keep a portion of a deposit if the buyer backs out of a deal?

My husband and I went to a car lot and gave the man $1,000 to hold a car for us until we sold my husband’s current vehicle. Then 2 days later, we decided to get a car somewhere else instead. So my husband went back to get our money and the salesman said he would only be able to give us $700 back. We never signed anything. The only paper we have from the whole thing is a receipt from the guy saying we gave him $1,000 and that we owed him $3000 more. We never discussed what would happen if we decided to back out of the deal. Can they legally keep the $300 difference?

Asked on November 27, 2011 under General Practice, Louisiana

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

This is a used car lot, correct?  First, as I am sure that you now realize, leaving without getting anything in writing can lead to serious problems down the road.   What you do have is an oral contract for the purchase of the car but one needs to check if this type of contract violates the statute of frauds in your state for this type of transaction.  Under the statute of frauds it states that certain types of contracts must be in writing to be valid.  This could be to your benefit depending.  It is my understanding that car dealers are not required by law to give a 3 day right of cancellation of a contract.  That would be at their discretion.  he fact that no such discussion regarding cancellation or fees was had between you may also work to your advantage.  Sue him in small claims court and file a complaint with the state attorney general's office.  Good luck.


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