Can a person that takes a down payment for a vehicle hold that money if the vehicle is stolen or sold to someone else?
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Can a person that takes a down payment for a vehicle hold that money if the vehicle is stolen or sold to someone else?
Person selling vehicle will not return down payment.
Asked on November 12, 2011 under Business Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If the vehicle is stolen after the down payment is made but before title and the risk of loss is transfered, the seller would have to return the down payment. In this case, the contract (the agreement to sell the vehicle) has become impossible due to a change in circumstances; when a contract becomes impossible, it is rescinded or voided, and a party which had put down a deposit should get its deposit back.
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