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


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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.