Legal Question in Business Law in California

Re: Automotive purchase agreement/contract

The extra $750 might be interest on the loan they couldn't provide you. I don't think they can ask for the interest if you're paying in full up front. You should hold them to the sales price and demand they release the car to you as agreed. Or, you can pay the extra $750 under protest, take possession of the car, then sue them in small claims court for the over-charge.

Re: Automotive purchase agreement/contract

Well, the previous answer may be correct, but I would suggest an alternate theory -- and whether it is correct or not would depend upon the language of the contract itself, which I haven't seen. Consider this:

If the contract signed by you and the dealer had a price term and a financing term, and you are unable to perform your obligations under the financing term, you may be technically in breach of the contract, and that releases the dealer from his obligation to sell the car to you at the contract price. Even if not getting the loan isn't a breach, it might be a "failure of a condition precedent" to the dealer's obligation to perform under the contract.

This is only a theory, but can you see that it might fit?

Now, whether it makes business sense for the dealer to assert his right to cancel and ask for a new contract at $750 more is another story entirely. It may be dumb of him to risk losing a sale. Or it may be a calculated risk that you will come through with the extra money.

Or, it could be that a careful reading of the contract would show that the dealer is still bound. Before taking any steps either way (suit, paying the $750, walking away, etc.) I'd recommend you read the contract carefully and see if it affords any clues that a non-lawyer can interpret....it should be written so the consumer can understand it, and it's terms should cover the situation you're in.