Vehicle sales contracts

The signing of the contract by the purchaser means an offer has been made to purchase the vehicle on the terms and conditions stated in the contract. No offer is made unless the purchaser is provided with a copy of the contract at the time it is signed by the purchaser.

The offer of the purchaser is accepted by the dealer when:
(a) the contract is signed by the dealer or a person authorized by the dealer, and
(b) notice of the acceptance is given to the purchaser. The contract will then be binding on both parties.

The offer of the purchaser may be withdrawn by the purchaser at any time before it is accepted by the dealer. It will automatically lapse at the close of business on the next normal business day for motor vehicle dealers.

Where the contract is subject to the purchaser obtaining finance, the contract is conditional upon the purchaser obtaining approval for the granting of a loan:
(a) before the latest time stated in the contract;
(b) for the amount stated in the contract;
(c) from the lender named in the contract (or a lender acceptable to the purchaser); and
(d) upon reasonable terms and conditions in the circumstances.

The purchaser agrees to take all reasonable steps toward obtaining loan approval.

If the purchaser has taken all reasonable steps towards obtaining loan approval, but does not obtain loan approval, then either the purchaser or the dealer may terminate the contract by giving notice to the other party. The dealer must immediately refund any deposit paid and return any trade-in vehicle to the purchaser.

Upon delivery of the vehicle, the purchaser will pay to the dealer all of the total purchase price, less any deposit paid and any value given to the trade-in vehicle.

In the case of a new vehicle, if at any time after the contract becomes binding on both parties but before delivery of the vehicle to the purchaser, the cost of the vehicle to the dealer changes because the manufacturer changes its price, or there is a change in statutory charges which apply to the vehicle, the total purchase price will be adjusted by the corresponding amount.

If the manufacturer increases the cost of a new vehicle to the dealer, the dealer is only entitled to pass on to the purchaser, an increase of up to and including 5% of the total factory price of the vehicle.

Payment by cheque for all or part of the total purchase price will not be considered to have been received by the dealer until the cheque has been honoured.

The dealer will deliver the vehicle to the purchaser on or before the delivery date stated in the contract.

In the case of a new vehicle, if a delivery date is not stated in the contract, the dealer will deliver the vehicle within three (3) months of the contract becoming binding on the parties.

In the case of a used vehicle, if a delivery date is not stated in the contract, the dealer will deliver the vehicle within one (1) month of the contract becoming binding on the parties.

Delivery of the vehicle to the purchaser will take place at the dealer’s premises, unless other arrangements are agreed to between the purchaser and the dealer.

The purchaser will deliver any trade-in vehicle to the dealer, and take delivery of the vehicle, within seven (7) days of being notified by the dealer that the vehicle is ready for collection.

The dealer remains the owner of the vehicle until the total purchase price has been received in full by the dealer.

Risk in the vehicle and the responsibility to ensure the vehicle will pass from the dealer to the purchaser when the Vehicle is delivered by the dealer to the purchaser, unless the purchaser and the dealer agree to some other arrangement and include it as a special condition of the contract. The applies whether delivery occurs at the dealer’s premises or any other location.

The purchaser will deliver the trade-in vehicle with accessories to the dealer in the same condition the trade-in vehicle was in at the time it was valued by the dealer for the purpose of the contract, except for normal wear and tear.

Purchaser's right to terminate the contract 

The purchaser may terminate the contract if the dealer has breached any of the obligations imposed on the dealer by the contract. If the contract is validly terminated by the purchaser, the dealer must immediately refund any deposit paid and return any trade-in vehicle to the purchaser. In the event the trade-in vehicle has been sold, the cash equivalent of the trade-in vehicle value determined at the commencement of the contract shall be refunded to the purchaser. 

Dealer's right to terminate the contract

The dealer may terminate the contract if the purchaser has breached any of the obligations imposed on the purchaser by the contract. If the contract is validly terminated by the dealer, the dealer may seek an amount up to, but not exceeding, five percent of the total purchase price of the vehicle as pre-estimated damages. Any deposit paid by the purchaser may be used by the dealer to meet the pre-estimated damages payable by the purchaser. Any surplus will be refunded to the purchaser.

See more information about cancelling a contract and pre-estimated damages on Cancelling a contract to buy a vehicle with a dealer page.

All notices required by the contract may be given by direct communication, telephone, electronically, fax or post to the addresses and numbers included in the contract.

If sent by post, a notice will be considered to have been received, unless the contrary is shown, at the time when the notice would have been delivered in the ordinary course of the post.