Make sure you check the small print, says Nigel Adams
In 2011 Mr Hughes walked into a Porsche dealership to place an order for a limited edition 911 GT3 RS4. The dealer did not yet have such a car on sale in its showroom, it did not even know at what price the car would be offered for sale. However, the dealer was taking orders for such cars in order to secure an allocation for one or more of them from Germany once they had been built. Mr Hughes signed a document, paid a deposit of £10,000 and was told by the dealer that he was first in the queue should Porsche HQ allocate one of the GT3 RS4s to them for sale. So far, so good.
However, when the long-awaited first 911 GT3 RS4 was delivered, the dealer decided to sell it to someone other than Mr Hughes. Mr Hughes was fobbed off by the dealer for a while but when he had finally run out of patience he sued the dealership. After a lengthy legal battle, Mr Hughes won his case and was awarded damages of £35,000, being the difference between the price of the car he would have bought (£135,000) and the price of the nearest equivalent type of Porsche (£170,000).
It seems obvious from the factual background I have summarised above that Mr Hughes was entitled to damages, but in fact the case was not quite so simple. Mr Hughes lost his claim to begin with and had to go to the Court of Appeal to get a positive outcome. One of the main difficulties in the case was whether the document which Mr Hughes signed required the dealer to sell him the first car allocated, or whether what he signed was merely an order form for the car which, because it was incomplete (there was no price), left Mr Hughes without any enforceable right to claim a GT3 RS4 at all.
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The Court of Appeal decided there was a contract and the dealer had breached it, entitling Mr Hughes to a financial remedy.
This case demonstrates very clearly that when seeking to buy a special order or limited edition car a purchaser must take great care to understand the full effect of anything they are asked to sign, especially when the purchase is dependent upon future availability. Any ambiguities or gaps in a purchase agreement can cause problems (as they did for Mr Hughes, although he won in the end) and so it is good practice to take time to understand the risks involved and the extent of the obligations upon the vendor before making a commitment to purchase and paying a large deposit.
Nigel Adams is a partner within the Collector Car Team at Goodman Derrick LLP
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