Can an auto lease be cancelled after the fact?

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Can an auto lease be cancelled after the fact?

I leased a car (3 days ago); all contracts were signed and the down payment was accepted. As of today they called saying I cannot lease the car because I am under deferred action and everything will have to be cancelled. can they do this? Shouldn’t this have been done before the contract was signed?

Asked on June 17, 2014 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

A lease may be canceled (either rescinded or terminated) only for:

1) Fraud or misrepresentations--that is, one party lied about or concealed critical information from the other;

2) Illegality--the contract is illegal, or it is illegal for one or both of the parties to enter into it;

3) Impossibility--something is making it physically impossible to perform (e.g. a contract to sell a car, and then a lightning bolt hits the car, destroyng it, before the sale occurs).

4) Material breach--one party violates one or more important obligations.

Only if one of the above occurs can the lease be cancelled; if it does occur or is discovered, it does not matter whether it was discovered after signing the lease or not.


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