Car Law A to Z: C is for Contract


When purchasing a vehicle you sign many documents which will constitute legally binding contracts. The rule of thumb to use is that you should read and understand every document you sign. Too often the document that you sign without understanding is the one that can come back to bite you.

Although every document you sign does not amount to a contract you should appreciate and understand the significance of what you are signing.  Some documents commonly seen in vehicle transactions include a bill of sale, retail installment sales contract, damage disclosure statement, title application, and Buyer’s Guide.  Nowadays many dealers also require customers to sign arbitration agreements which essentially serve to limit the consumer’s rights in the event a legal issue arises.  A conditional delivery agreement (meaning the vehicle purchase transaction is not final until the finance contract is approved by the prospective lender) is typically either a stand-alone document or may be embedded in the language of the finance contract.  And there are several other documents which usually are signed and exchanged during a vehicle purchase or lease transaction.

If you have never purchased a vehicle before it would be a good idea to ask for blank or sample forms for you personal review before you sign anything.  If you have questions about a vehicle transaction you should consult an experienced attorney for a consultation.

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