Question:

I say he can't get his money back...but can get out of the contract...Am I on the right path...?

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At the end of the summer, Jeff Fresh had earned enough money to put a down payment on a car. He decided to continue working part time during school to earn money for the car payments. Jeff purchased a car from Smooth Sales Used Cars. Smooth did not ask Jeff how old he was; the salesman assumed he had reached the age of majority. Jeff paid the down payment and signed the contract stating that he would make payments of $200 each month. Six months later Jeff lost his job and could no longer make the payments. Jeff took the car back to Smooth and said he wanted to cancel the contract and that he wanted his money back. What are the possible outcomes? In your explanation, be sure to compare and contrast potential legal and equitable remedies

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  1. Obviously the first two posters did not read your question very well.

    Your friend was a minor when he signed this contract this means that it is not legal, it also means that your friend committed fraud when he signed it so it's going to turn into a peeing match between the dealer and your friend and could very well end up in court.


  2. So you are saying that when filing in all the paperwork, the date on his driver's license was never checked (had to copy down the DL#).  No one will sell a car to anyone under the age of 18.  If he was 18, he is on the hook.

    He could also be in trouble for impersonating someone over the age of 18 - fake id.....

  3. If the car was financed, he can't get his money back.  Buying and financing are usually done in two different places.  He loses.  He can't get money back, and the car no longer is the property of the deal, but of the finance people. If he was a minor when he bought the car, that could be a different story.

  4. He can't get his money back and he can't cancel the contract unless  1) he was not of legal age when he signed,  2) there was an escape clause.    

    If he stops making payments, Smooth will reposes the car and he will be sued for the difference and what Smooth can sell the car for and what he owes.  His best option is to sell the car and pay Smooth off ... and get a bicycle.

  5. Sorry but he can get his money back - if he was not of legal age he was not able to legally sign the financing contract and can not be held to it's obligations.

  6. Jeff was a minor at the time he purchased the car and therefore he has the right to repudiate the contract at any time before (or within a reasonably short time after) his majority, i.e., 18th birthday.

    The remedy relates to payment of money, and therefore involves legal, not equitable, rights and remedies.

    In order to repudiate, Jeff must restore to the other party to the tranaction all valuable consideration he received. Upon repudiation, Jeff gets back everything of value he paid, subject to exceptions that result from the fact that the car is not in the same condition as it was when sold.

    Under the majority rule, no deduction may be made for depreciation of the car due to normal wear and tear; any real damage to the car that has  not been repaired will result in a deduction for the cost of the repairs or, if appropriate, for the diminished value of the car. For example, if the car is worth $1000 and it has $500 in body damage, it would be uneconomic to repair the damage, so the deduction would be for the lesser resale value of the damaged car.

    A minority of states also permit the seller to retain the payments received to cover ordinary depreciation, wear and tear.

  7. OK, I'm not legally trained, however I would suggest common sense be applied ..

    I assume (from the way the question is worded) that Jeff is underage (18?) so he can't legally sign a contract .. so the contract is void. However Jeff knows he is underage and has plainly committed a felony (misrepresentation, intend to deceive, obtaining a percunary advantage, fraud, etc etc)

    If the contract is void, Jeff has obtained the car by deception (so that makes it stolen property and Smooth can reclaim it) but has made voluntary payments to Smooth as part of that deception. I would suggest Jeff can apply to the courts to reclaim his repayments ... whilst Smooth can apply for compensation for devaluation etc. of the car.

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