Car dreaming cloud

Picture the scene: you discover that a limited edition of your dream car is being produced. You rush to contact a car dealer who says that as long as his dealership is allocated one of the highly sought-after cars, he will put you on top of the waiting list. You both sign an order form and you hand over a substantial deposit, with the price to be agreed further down the line.

Then you wait.

And wait.

Eventually you find out that the dealer was allocated one of the cars but that they skipped over your name on the list and supplied it to another customer instead.

What do you do?

Ok, so this is almost certainly a problem that most of us are unlikely to encounter, but it did happen to Mr Hughes who was at the top of the waiting list for a limited edition of the Porsche 911 GT3 RS4 model. When he found out what had happened he commenced a County Court claim against his Porsche dealer, Pendragon Sabre Limited (Pendragon), for breach of contract[1].

At first instance, the judge concluded that the payment of the deposit was “no more than an ‘agreement to agree’” and therefore unenforceable. He held that “There was no contract…all [Mr Hughes] did was to express his wish to purchase a GT 3. There was no vehicle. There was no price. There was no delivery date.” 

On appeal, however, the judge reversed this decision, commenting that, “it is as plain as a pikestaff that Mr Hughes entered into some sort of contract with Pendragon”. He took into account the following:

  1. That under the Sale of Goods Act 1979 there can be an agreement to sell “future goods”
  2. There can also be a contract for the sale of goods, “the acquisition of which by the seller depends on a contingency which may or may not happen”
  3. The fact that the car was not in existence at the time of the sale, the fact that Pendragon might not be allocated one in any event and the fact that no delivery date was specified was not, therefore, fatal to a finding that a contract existed
  4. The bottom of the order form stated that the document contained the terms of a contract and made reference to terms and conditions which had “all the hallmarks of what one would expect with an agreement to sell a motor vehicle”.

Having found that there was a contract and that the contract had been breached, the judge turned to the assessment of damages. In the usual course, damages are awarded based on the difference between the price the buyer contracted to pay for the goods and the current market price at the time those goods should have been delivered. The problem here was that there was no contract price and the car was a limited edition Porsche, for which there was no available market. In the circumstances, therefore, the judge looked at what the contract price would have been and what Mr Hughes would have had to pay to obtain “the nearest equivalent vehicle”.

In this respect, Mr Hughes had produced evidence at trial that the list price for the basic model was £128,000 to £129,000. With extras, the price was around £140,000. The only thing Mr Hughes had wanted to change was the colour and on this basis the judge worked on the assumption that he would have paid £135,000 for the car. In terms of the nearest equivalent, Mr Hughes had adduced evidence of similar vehicles with a price of £170,000. On this basis, the judge awarded damages of £35,000, being the difference between the two, which represented Mr Hughes’ lost chance of purchasing his dream car.

Whilst each case will turn on its own facts – and the facts of this case are unique – this case does provide a helpful reminder of the provisions of the Sale of Goods Act 1979 and the approach the Court will adopt in assessing damages in circumstances where there is no available market.

For more information, email blogs@gateleyplc.com.

[1] Hughes –v- Pendragon Sabre Ltd (t/a Porsche Centre Bolton) [2016] EWCA Civ 18


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.