QUESTION
This might be in wrong legal topic.. I live in Indiana and was selling a car; the buyer lives in Michigan; the buyer backed out after partial payment
Asked on Oct 03rd, 2011 on Business Law - Indiana
More details to this question:
There is no written contract, but the verbal agreement was for the car to be paid off within 2 months, at what time he could come pickup the vehicle. He has only paid ~40% of the agreed selling price, all money he sent was in blank cashier''s checks. The buyer now wants to back out and wants ALL of his money returned. I had to absorb the cost of insurance for 4 months (going on 5 now), costs of advertisement (which I''ll have to pay AGAIN for), and general upkeep. What is my legal obligation here? Do I have to return all of the buyers money? Or is what he sent considered non refundable due to the upkeep, advertisement, and insurance costs I''ve had to pay during this time.
The buyer until today has been out of communication for over a month.
So to simplify the question -- How much, if any, am I legally responsible to return to the buyer who backed out of the deal?
All payments to me where from blank cashier checks, no sender or recipient named on the checks.
1 ANSWER
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Sales of goods, including used cars, are governed by Article 2 of the Uniform Commercial Code, which all states have adopted. As a general matter, when a buyer defaults, the seller is entitled to recover his reasonable costs of resale, including any decline in value of the property. Once you have resold the car and determined the difference between (a) what you would have realized had this defaulting buyer performed its obligations, and (b) the actual proceeds of resale, including costs of resale, you can attempt a negotiation with the buyer over how to resolve this.
So, to be clear, you are entitled to recover the difference between the original sale price and the resale proceeds, together with "incidental damages" you have sustained as a result of the breach. Any excess over that should be refunded to the defaulting buyer.
Answered on Oct 04th, 2011 at 7:06 AM