When is a contract formed?

[newuser2142]

I'm in a dispute with Evans Halshaw about whether or not my purchase was what they'd class as a distance sale. Their argument is that even though I paid for it fully from a distance without visiting and got a payment receipt plus another email saying 'You've bought your car' stating the purchase amount and next steps for collection, their T&Cs say that a contract isn't completed until an order form is signed. I did sign a handover checklist and a 'Vehicle Order' when I picked up the car.

I've checked and they're right, it does say that, in S1 of their Terms it says 'completion' is not until delivery of the vehicle (in my case, collection) and 2.1 says the contract is formed when the order is signed and dating the order. (https://www.evanshalshaw.com/legal/new-used-sales/)

But is it legitimate for a company to insert a clause like that saying the contract isn't formed until a specific point? I thought the contract was formed once I'd paid for the car and got a receipt!

[R0b]

Hi,
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 or the CCRs for short, will only apply if the contract has been concluded at a distance. When a contract has been concluded is entirely fact specific to each scenario.

But is it legitimate for a company to insert a clause like that saying the contract isn't formed until a specific point?

Yes it is legitimate. Here, Evans Halshaw are saying that there is not contract until the order form has been signed by their authorised representative so until that point, your payment is merely an offer to purchase the car.

I thought the contract was formed once I'd paid for the car and got a receipt!

A common myth and a dangerous assumption to make. If you shop online and make a purchase, you will quite often find terms and conditions stating that the sale has not concluded until the retailer has actually shipped the goods. This is intended to allow them to catch any erroneous pricing mistakes and then you will be offered a refund unless the retailer accepts your offer of payment.

I did sign a handover checklist and a 'Vehicle Order' when I picked up the car.

Based on this, it would indicate the contract was not a distance sale.

Just as an aside, the definition of completion is a bit of a red herring for the purposes of your issue because completion is not required in order for the contract to be formed. You could sign the order form first, thus forming a contract before the delivery of the vehicle takes place.

Also to point out, the terms do state that you could cancel the contract but you lose any deposit (or proportion of it) and are liable to pay any costs incurred in connection with the car the contract or cancellation. That's pretty vague but if you returned the car to them, then you may only be liable for admin costs of cancelling the contract, which those costs they would need to prove. Different story if you took the car on finance.

[newuser2142]

Hi,
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 or the CCRs for short, will only apply if the contract has been concluded at a distance. When a contract has been concluded is entirely fact specific to each scenario.
Yes it is legitimate. Here, Evans Halshaw are saying that there is not contract until the order form has been signed by their authorised representative so until that point, your payment is merely an offer to purchase the car.
A common myth and a dangerous assumption to make. If you shop online and make a purchase, you will quite often find terms and conditions stating that the sale has not concluded until the retailer has actually shipped the goods. This is intended to allow them to catch any erroneous pricing mistakes and then you will be offered a refund unless the retailer accepts your offer of payment.
Based on this, it would indicate the contract was not a distance sale.
Just as an aside, the definition of completion is a bit of a red herring for the purposes of your issue because completion is not required in order for the contract to be formed. You could sign the order form first, thus forming a contract before the delivery of the vehicle takes place.
Also to point out, the terms do state that you could cancel the contract but you lose any deposit (or proportion of it) and are liable to pay any costs incurred in connection with the car the contract or cancellation. That's pretty vague but if you returned the car to them, then you may only be liable for admin costs of cancelling the contract, which those costs they would need to prove. Different story if you took the car on finance.

Thank you - I thought there was some legal prevention to stop any terms which were designed solely to negate statutory rights but if they are OK to say the contract isn't formed till signing of an order form then they're within their rights.

[R0b]

That’s correct, the terms and conditions that would be contrary to consumer rights law would be rendered invalid, but you have to have the right in the first place to be able to rely on it.

Had the paperwork been signed off premises, then it’s likely to have been deemed a distance sale notwithstanding you collecting the car. I should point out that if you were given the impression that the contract had been concluded when you had made the payment for the car, then it's possible you could argue that you were misled into thinking the contract was concluded at a particular point in time, especially if you were unaware and it was not brought to your attention that the contract is not formed until the order form was signed because it was buried in the terms and conditions.

Not an easy argument to make and I would expect Evans Halshaw to dig their heels in to defend their position, which means your only route to a solution is likely to be legal proceedings. Claims under £10k are usually (but not always) allocated to the small claims track which means legal costs are not recoverable but there is no guarantee a court would agree with you in which case you will be out of pocket for court fees and very limited costs payable to the other side which are around the £200 mark in most circumstances. Claims over £10k means legal costs are recoverable so if you lose they could be substantial.

Can I ask the reason why you want to cancel the contract?

[newuser2142]

That’s correct, the terms and conditions that would be contrary to consumer rights law would be rendered invalid, but you have to have the right in the first place to be able to rely on it.

Had the paperwork been signed off premises, then it’s likely to have been deemed a distance sale notwithstanding you collecting the car. I should point out that if you were given the impression that the contract had been concluded when you had made the payment for the car, then it's possible you could argue that you were misled into thinking the contract was concluded at a particular point in time, especially if you were unaware and it was not brought to your attention that the contract is not formed until the order form was signed because it was buried in the terms and conditions.

Not an easy argument to make and I would expect Evans Halshaw to dig their heels in to defend their position, which means your only route to a solution is likely to be legal proceedings. Claims under £10k are usually (but not always) allocated to the small claims track which means legal costs are not recoverable but there is no guarantee a court would agree with you in which case you will be out of pocket for court fees and very limited costs payable to the other side which are around the £200 mark in most circumstances. Claims over £10k means legal costs are recoverable so if you lose they could be substantial.

Can I ask the reason why you want to cancel the contract?

I wouldn't say I was given an impression by anyone, it was more just because of the confirmation emails - I would have assumed that meant a contract was complete. Meaning that if I wanted to pull out I would be liable for costs of some sort, and that they'd fully committed to the sale. I don't remember reading the T&Cs but I'd assume they were at least linked somewhere whilst I was completing the checkout.

The price was over £10k so if that means the costs are going to be high in a lost case then it's probably not worth bothering.

The main reason I wanted to cancel is simply because the seat of the car is causing an old injury to be severely aggravated. The seat is as it was meant to be and I had no anticipation that this would happen, it's never happened before but there's something about the design that's causing it to trigger - despite having tried multiple cushions and seat supports!

[R0b]

Well, if there is any language in those emails that indicate you are in a contract then that would be reasonable grounds to argue that the contract was formed at the payment stage rather than when the order form was signed. Section 50 of the Consumer Rights Act implies a contractual term that any information you have relied on will be treated as a term of the contract, unless the retailer has qualified any information at the time of it being given.

So if you made a payment by distance and the confirmation emails stated that your payment constitutes a contract and there's no link to the terms and conditions or any other information to indicate that a contract will be subject to the order form being signed, then that is where section 50 might kick in.

Without anything else to support your belief, I would say you have a weak case at best and isn't worth trying to risk a claim especially if the vehicle is over £10k. My only suggestion would be to consider replacing the actual car seat(s) to something that might be more suitable and prevents aggravating the injury if that's possible.

[newuser2142]

If the confirmation emails you received upon making a payment did not include a link to the terms and conditions or any other information indicating that the contract is subject to the order form being signed, and if these emails stated that your payment constitutes a contract, then you could argue that a contract was formed at the payment stage based on the information you relied upon.

There were these two emails - I didn't get the 'documents' referred to in the first one:

Subject line - 'You've bought your car!'

Email body:
Congratulations, XXX – you've bought your car!


Please make sure you bring the following documents with you:
Proof of insurance (We have a drive away insurance available if you would like to arrange this with us)
Driving license so we can give you a full demonstration of the car and ensure you are comfortable with all the controls
Photo ID (Driving License or Passport)
Proof of Address – (Such as utility bill or bank statement from the last 3 months) this will need to be for the same address you would like to register your new car at.
We’ll send you an email shortly with your car documents (please check your junk folders if you've not received these).

Should you have any queries or concerns in the meantime, please don’t hesitate to give our sales team a call on 01302 308 352 and we will be happy to help you.

If you need to get in touch, your Payment Reference is XXX.
Your Car
XXXX

XXX 5dr Auto

£XX,XXX.00
Cash Price
Includes

Quality Assured Inspection Pass

Price Guarantee

Minimum 3 Month Guarantee

Complimentary Accident Assistance

Background & Status Checked

Drive Away Today

Your Payment
Vehicle Cost
£xx,XXX.00

Refundable Reservation Fee
Free

Total Price £xx,xxx.00


XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX


Second email subject line: Confirmation of your order placed with Evans Halshaw Nissan

Email body:

************************************************** **********
* Your order has been accepted.
************************************************** **********

Please retain this receipt for your records.

This e-mail confirms your order placed with Evans Halshaw Nissan.

Payment data
------------

Beneficiary : Evans Halshaw Nissan
Address : Loxley House,
Little Oak Drive, Annesley
GB-Nottingham NG15 0DR
Website address : http://www.evanshalshaw.com
E-mail address : nissanaccounts@evanshalshaw.com

Order date : XXXXXX
Order reference : XXX
Payment reference : XXXX

Total : GBPXXXX.00

Charging method : VISA
Sub-brand : F

Status : Sale



************************************************** **********
* Additional information
************************************************** **********

The payment is processed by a payment service provider that satisfies the highest security standards.
Should you have any queries about the order, please contact Evans Halshaw Nissan directly.

[JK2054]

Are there any T&S in the footer/email disclaimer at the bottom?

[newuser2142]

No nothing on the payment receipt, and just some generic links to the dealership social media and website on the congratulations email.

[JK2054]

Then I'd be in agreement that the contract is arguably formed at the time of payment.