Can a dealer take back a discount even if I've signed the papers?

Is this legal?
by Robby Consunji | Feb 6, 2018


Hi sir, I recently purchased a car. The car is to be released tomorrow, but there is one problem: They initially gave me an P80,000 discount but called me yesterday that the discount wasn’t approved and that they can only give P45,000 discount. Is it legal for them to do this after I've already paid the down payment and have signed all the papers? I really don't know how to go about this situation.

Fred

Let me ask you: What exactly did you sign? Was it a confirmed sales order, or a contract of sale subject to conditions?

In a confirmed sales order, the buyer pays a down payment and the car dealership promises to deliver the car for an agreed purchase price and within an agreed period of time. The car dealership cannot simply withdraw the discount, and must sell the car at the agreed purchase price and discount.

In a contract of sale subject to conditions, it is possible that the larger discount is subject to further approval of a senior officer at the car dealership. If it was a contract subject to conditions, the car dealership can insist on the lack of approval and demand that the buyer proceed with the purchase without the P80,000 discount.

Under the rules on evidence of written agreements, when the terms of an agreement have been reduced to writing, the sales contract (in this instance, for the sale of the car) is considered as containing all the terms agreed upon. Between the parties, there can be no evidence of other terms and conditions other than the contents of the written agreement.

In short, the parol evidence rule provides that the written contract controls the relationship of the parties. Whatever is not found in the written contract is understood to have been waived and abandoned.

Did the salesman verbally assure you that it was unconditionally subject to the P80,000 discount? And is the written sales contract contrary to such verbal assurance? If so, the terms and conditions of the written contract will control the relationship of the parties.

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Although almost like shooting for the moon, the buyer can try to modify the terms of a written contract by presenting evidence and claiming an issue regarding the following: a) an intrinsic ambiguity, mistake, or imperfection in the written contract; b) the failure of the written contract to express the true intent and agreement of the parties thereto; c) the validity of the written contract; or d) the existence of other terms agreed to by the parties after the execution of the written contract.

In which case, the verbal assurance of the salesman may constitute 'sales talk.' The law allows a degree of latitude for advertisements to be clear 'puffery' or sales talk, on the basis that a reasonable consumer is expected to know that some vague or generalized exaggeration occurs in advertising and sales presentations. However, the car dealer must be cautious in such 'sales talk,' as it may be in violation of the law if it is misleading to the consumer or buyer.

Does the salesman's verbal assurance constitute deceptive and unfair sales acts or practices?

In the course of negotiations, the sales talk by the seller must not misrepresent the product, price and discounts so the customer will buy it. Sales talk may be to inform the consumer of the features and benefits of the product or service, however, it must not include trickery and deception.

The customer must be aware that the usual exaggerations in trade, when the customer had an opportunity to know the facts, are not in themselves fraudulent. There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. Where consent is given through fraud, the contract is voidable.

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Under the Consumer Act, an act or practice shall be deemed deceptive whenever the seller, through concealment, false representation of fraudulent manipulation, induces a consumer to buy the product or service. The act or practice of a seller is deceptive when it represents that a specific price advantage or discount of a consumer product exists when in fact it does not.

The Consumer Act requires the car dealership to disclose the truth about the car and its price, provided the customer will inquire and seek more information. Any person who violates the Consumer Act shall be punished by a fine or imprisonment, and shall be liable for actual damages suffered by the consumer.

Did you sign a printed form of contract?

Contracts of adhesion, where the car dealership imposes a ready-made printed form of contract on the buyer, are not prohibited. The prospective buyer is free to reject it entirely; if he agrees, he gives his consent to all that is written including the fine print containing terms and conditions.

Always read the fine print before signing the contract form; or, ask the salesman to explain each and every paragraph of the pre-printed sales order form. If a condition does not apply to your purchase, remove or cross out that condition from the sales order form before signing the contract.

 

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