How Does A Car/Vehicle Sales Agreement Helps Protect Consumers?

The car sales contract is a legally binding contract. Before signing it, make sure that you read it and if in doubt, raise any questions prior to signing it.

Important: If you have signed contracts to buy a new car with more than one trader, you may have to buy more than one car.

Points to remember before signing a car sales agreement
- You should never sign a blank car sales contract
- You should never sign a car sales contract that is incomplete
- Always insist that all costs are clearly listed
- Do not sign the contract if a delivery date or deadline is not specified
- Do not sign the contract if the contract does not specify the color or any other particulars of the vehicle, whether standard or extra

The Law of Consumer guarantees
Buyers have additional statutory rights under national ‘consumer guarantees’ ascribed in the Australian Consumer Law. It is important that you know that whether or not there is a warranty or extended warranty from the manufacturer or dealer, the car sales agreement or contract cannot exclude those rights. The sale of both new cars and used vehicles come under the Law. Additionally, the cars must be bought from a dealer or manufacturer on or after 1 January 2011.

Note: The Law does not cover vehicles bought at auction or once-off from a private seller

Car Sales Agreements Terms

Contracts for the sale of motor vehicles or vehicle sale agreement by licensed dealers (if not sold to other dealers or sold by auction) are regulated under the Motor Vehicle Dealers Act. Therefore, these are legally binding contracts and, hence, they must be in writing. They must also contain certain prescribed terms and conditions which explain the rights and responsibilities of both the purchaser and the dealer under the contract. Furthermore, they also help determine how contractual matters are dealt with.

The prescribed terms and conditions generally include the following key terms:

• A copy of the contract must be given to the buyer at the time he or she signs the contract
• A condition that the contract does not become enforceable until after it is signed by the dealer and duly accepted by the dealer
• Detail the exact terms of any financing available
• Details on contract termination by either the consumer or the dealer
• Details on any price fluctuations before delivery and how to handle it

By law, the dealer should deliver a new vehicle within three months and a used vehicle within one month after the car sales agreement has come into effect. Otherwise the contract can be cancelled.

Note: If there are additional terms and conditions in a car sales agreement, such terms must not contradict or diminish the requirements of the prescribed terms and conditions. Net Lawman provides professionally drafted Car Sales Agreements for both sellers and buyers of a car/vehicle. These documents ensure that they are compliant with existing laws and help in maximizing protection for both parties by including the necessary prescribed terms and conditions.

Why Need Car Sale Agreement?

This question can be best explained with a situation of a blog user who recently was going to sell his car because there wasn’t enough space in garage. An elderly man with his family came and sees his car. He agreed to buy and gave the car owner $200 deposit. But both parties didn’t sign any papers and the car owner didn’t even issue him a receipt to say he got the $200 from the buyer. As narrated by the blogger few days later he changed his mind and decided not to sell his car as his girlfriend moved out of home since he again had space for his car. Car owner left voice message on buyers’ phone but he replied angrily and said he want damages to be paid because apparently they had a verbal contract.

Reason to put up this case study is to elaborate the importance of car sale agreement. Since the buyer didn’t had any written agreement he cannot prove in the court that he deposited any money or they reached any contract or they agreed upon any warranties or else. The payment of a deposit does not in itself mean that a contract was formed. For an agreement to be binding its terms must be certain. While a contract can be void for uncertainty, a court will generally try to uphold a contract with vague specifics by applying a 'reasonable test'. So that in the present case the court would likely conclude, for instance, that the buyer would pay the balance within a 'reasonable time.' If payment were made within a week or two of the car being ready for collection (i.e. the plates changed and the car alarm removed) then that would be "within a reasonable time."

In a civil dispute the buyer only has to prove his case on the balance of probabilities, and unless the car owner is prepared to lie under oath, and deny that he accepted a $200 deposit, the court is likely to accept it was made as a deposit to secure the purchase of the car.

What needs to be done prior to negotiate a car sale agreement
Prior selling a car seller needs to be certain whether it’s his final decision to sell his asset. On reaching the final decision next thing is to advertise his intention on sale forums in print and web medium. Afterwards you need to fulfill following steps

• Complete, tear off and send the 'Notice of Disposal' section of the car's Certificate of Registration to the nearest Motor Registry.
• The buyer must, within 14 days of purchase date, provide in person at the nearest Motor Registry.
• Proof of identity.
• An 'Application for Transfer of Registration' form
• Certificate of Registration
• Roadworthiness inspection report (pink slip)
• Transfer and stamp duty fees
On completion of following formalities the buyer then can demand following guarantees in case he is buying the car
• Title(Owners name is must) to the goods
• Undisturbed possession of the goods(Pay off and other issues)
• There are no undisclosed securities on the goods.

One thing more before you purchase a used car, you should always check the Register of Encumbered Vehicles (REVs) in the state or territory where the vehicle is registered to confirm whether there is an outstanding debt on the vehicle. By doing a REVs check, you can confirm whether the vehicle is clear of any encumbrances (i.e. unpaid debts). A clear REVs certificate on the day that you are purchasing a used vehicle protects you from repossession due to a previous owner's unpaid debt. To do a REV check, you may need to supply the following vehicle identifiers:

• Registration number. 
• Registration state.
• Engine number.
• VIN/chassis numbers.

 What needs to be included in the car sale agreement?
Car Sale Contract is quite a negotiable entity and it solely depends upon comprehensive understanding between the buyer and the seller. For general idea following contents are included in the agreement but again it depends on the circumstance
• Specifications of the vehicle.
• Agreed terms.
• Warranties by the seller.
• Pay off mechanism.

What kind of guarantees is mentioned in vehicle sale agreement?

Buying a car is always a tricky situation as a consumer because of the uncertainty of what you are buying. Not just the old cars but new cars may also contain flaws as per your desire and requirements. Legally you as a consumer can cover yourself by negotiating comprehensive warrantees and then document them in a form of a vehicle sale agreement. These warrantees are related to the engine run time to security system. A comprehensive and well drafted agreement provides ample space for fall back mechanism in case there are any difficulties after you acquire the car. As seller one must be care full while committing to the warranties because you need to honor them in the future, so one must be aware of draw backs and faults of the car while selling it.


Following are few warranties rendered for the new cars
• Car needs to be of promised quality - safety, durability and free from defects
• Acceptable in appearance and finish and perform as expected.
• Car needs to be fit as per the purpose is promised.
• Demonstration model and sample car will match the actual one.
• Advertised description of the car needs to match the actual one.
• Honoring of express warranties.
• Provision of spare parts and repair facilities need to be rendered for a reasonable time.

When it comes to old cars different set of warranties are required. In some cases the cars are not paid off. Or it might turn out the car is not up to the safety and fitness standards. Common warranties rendered for used cars are as following

• Title(Owners name is must) to the goods
• Undisturbed possession of the goods(Pay off and other issues)
• There are no undisclosed securities on the goods. Before you purchase a used car, you should always check the Register of Encumbered Vehicles (REVs) in the state or territory where the vehicle is registered to confirm whether there is an outstanding debt on the vehicle. By doing a REVs check, you can confirm whether the vehicle is clear of any encumbrances (i.e. unpaid debts). A clear REVs certificate on the day that you are purchasing a used vehicle protects you from repossession due to a previous owner's unpaid debt. To do a REV check, you may need to supply the following vehicle identifiers:
• Registration number.
• Registration state.
• Engine number.
• VIN/chassis numbers.


What should be the contents of vehicle sale agreement?
 vehicle selling contract is quite a negotiable entity and it solely depends upon comprehensive understanding between the buyer and the seller. For general idea following contents are included in the agreement but again it depends on the circumstance • Specifications of the vehicle. • Agreed terms. • Warranties by the seller. • Pay off mechanism.