Contract question...VERY important. 10 pts.

Question

OK So I know not to lend to family NOW. But heres my story and question

SO I sold my 1996 Honda Civic to my brother for 4000. He didnt put a down payment on the car, but we drew up a contract that said that he would pay $200 a month every month until the car was paid in full.

A couple months ago hes been having problems paying and i allowed him to pay late (Stupid). He just had car problems and I told him he could hold onto the money FOR NOW. 2 days later I sat down with him and told him he needed to pay all his bills on time, including the car payment.

Well...a week later i look into my bank statements and I'm 177 in the hole. 105 dollars in overdraft fees. I called him and told him he had to pay it, because had he paid on time, this wouldnt have happened. He refuses and I told him i can legally take the car away since I have the title and he hasnt been paying on time (i wont count the last few months, but i will count this month), as the contract says he should.

Who is in the right and who in the wrong? I really need help. thank you.

Answer 1

You're within your rights to take the car and sue for your overdraft and other charges.

EDIT:

Sorry, Chris.  Finance companies accept late payments, too. That doesn't void your contract. She can still sue for the overdraft.

To the OP: you can't repo it if the vehicle IF he's insured it as he said he would AND he's current on his payments. If he's current, you still can get the overdraft fees and IF he's still behind, you CAN take the car.

Answer 2

Sadly, you are both right and wrong.

You are correct for asking to be paid on time. You are wrong for not having a written contract, (as is he, since he doesnt have title to the vehicle, he has no proof of the agreement). You can rectify everything by starting anew.

Determine how much more he owes you. (By the way, it doesnt sound like you were charguing him interest, point that out to him).

Then write up a contract stipulating how much he will pay you for how long and when.

Also, include a late payment fee.

If he balks, take the car sell it, and pay him the difference of what you got and what he owes.

Answer 3

Take it back.  Don't bother suing him because he's family, but get it back and sell it for the whole value to a stranger to get it out of the driveway and end the argument.  

You have title, you own it.  Plain and simple.

ps-  Chris is wrong, imho. :)  He can't sue you for the value of the car, what rubbish.  The only loss he would show would be the payments he made on the car, which is offset by the use during the time he had it.  Totally wrong.  Take it back, tell your brother to go buy a car from a dealer, best of luck.

Answer 4

Edit: If a finance company (or an individual lender) says that they are willing to accept late payment without penalty, they cannot then retroactively add penalties.  It doesn't void the contract, I never said it did, in fact I said quite the opposite.  You cannot sue for overdraft if you accepted late payment.  

Imagine if you had a bill due to Citibank and they told you that it was OK if you paid three days late.  Now imagine that they sent you a bill for $100,000 because they missed some payment for one of their facilities because they didn't have your money.  The bill would be thrown aside as junk by a court because a judge would have assumed that you would have considered the ramifications of a later payment and have accepted the risks of such a payment.

Ata, please don't offer advice when you know little to nothing about basic contract law.

He is in the right in this situation.  Here is how a court will break it down for you:

1) You allowed him to pay late.  Logically, you would have considered where you were economically and would have accepted the late payment with your status in mind.  The overdraft fees were the result of your spending and so you could not recover for that.  

2) You cannot take the car back simply because you have a title.  Contracts can be enforced and formed on two grounds.  The first is an explicit/express contract (a written or oral contract).  You have an express contract for sale with your brother.  You cannot take the car back arbitrarily after he has complied with all of your wishes (remember, you accepted late payment).

Repossessing the car and selling it could make you liable to him for the amount of the vehicle.  I would advise you not to do that.

Answer 5

>> Who is in the right and who in the wrong? <<

If the title is in your name its your car.  In fact, if he were to get into a crash you, as owner, would still be responsible.  & I'm willing to bet that you haven't kept up the insurance & neither has he.