Legal Question in Business Law in California

Purchase With Option To Buy Back

I am in a contract with an individual. I borrowed $12,000 and used my boat as collateral. In 60 days I agreed to pay back the $12,000 plus $4000 and the individual will give me back my pink slip. The agreement that we both signed was a ''bill of sale with option for seller to buy back in 60 days''. I have received the $12,000. The contract was not notarized. Now the investor wants to take possession of the boat until the end of the contract. That was not stated in the contract. Do I need to give him the boat? Can he file a police report if I do not give him possession? I am paying back the loan within the time specified in our agreement. What are my rights?


Asked on 9/29/08, 3:31 pm

2 Answers from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Purchase With Option To Buy Back

If the 60 days have not passed, if you have not breached (or made it clear to the other party that you will breach) and if the contract does not give him the right to take possession, then he cannot take the boat. Even if he could take it, failure to deliver it to him would not be a crime.

Additionally, I'm not sure the 200% interest rate (which is what your contract works out to on a yearly basis) is enforceable. The fact that your contract isn't structured as a loan may take it outside the usury statutes, and quite honestly I don't know offhand what those statutes forbid. Perhaps another LawGuru attorney will be able to address this point for you.

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Answered on 9/29/08, 4:35 pm
James Obecian law office san diego

Re: Purchase With Option To Buy Back

That contract is voidable at least as the additional $ 4K is concerned as that interest rate is illegal as usurous. Contact me directly.

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Answered on 10/01/08, 1:48 am


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