Car traders

Making a Contract

When you sell a car or carry out servicing or repair work, a contract is formed between you and your customer. This does not have to be in writing unless it concerns supplying credit.

Although most terms and conditions of a contract will be negotiated directly between the two parties the law adds certain terms and conditions whether or not they are discussed by the parties.

These can not be removed from the deal even if the customer agrees or signs a statement to that effect.

For example a statement “No warranty implied or given” cannot remove these terms.

Rectifying any breach of contract is your responsibility and any manufacturer’s warranty is in addition to your customers’ rights against you.

The Sale of Goods

The Sale of Goods Act says that:

You must have a legal right to sell the car

You do not have a right to sell a car still subject to a hire purchase agreement as it belongs to the finance company.

The goods should be of satisfactory quality

Goods should meet standards that a reasonable person would regard as satisfactory.

When considering the question of quality, regard should be given to:

  • Fitness for the purposes for which this type of goods are commonly supplied
  • Appearance and finish
  • Freedom from minor defects
  • Safety
  • Durability

The goods must correspond with any description applied to them

For example, a car described as a 1993 registered 1300cc, must have been registered in that year and have that engine size. The seller of goods will be responsible for any inaccurate description of those goods and as well as his civil liability, may also be liable to criminal proceedings.

If the goods you have sold are not of satisfactory quality, do not correspond with their description or are not fit for their purpose, your customer can claim against you for the cost of having faults put right and may be able to reject the goods and claim a full refund.

Servicing and Repair Contracts

Any materials supplied as part of a contract should also satisfy the above requirements.

The Sale of Goods Act also says that any work you carry out must be done with reasonable care and skill.

Where no price was agreed prior to the work being done, the consumer shall be expected to pay only a reasonable charge.

This does not allow a business to undertake work that was not previously agreed by a customer. It merely prevents excessive charges being made after the completion of any agreed work.

Where no time limit was agreed, the work must be completed within a reasonable time.

If you do not meet these requirements, your customer will have a claim against you for breach of contract.

This means that they may be able to claim against you the price they have paid for the work and in some cases, any reasonably foreseeable costs they have incurred arising from the breach.


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