The Law Handbook 2024

644 Section 6: Houses, communities and the road The purchaser may also be able to recover civil penalties if the finance contract breaches the NCC; for example, for not being in writing (s 14) or for improperly disclosing required information (s 17). The purchaser could also apply to have the finance contract re-opened if it is unjust (s 76). That application can be made to either the Federal Court or to the Australian Financial Complaints Authority ( AFCA ) (see ‘Contacts’ at the end of this chapter). Applying to the Federal Court can be costly. However, it is free to apply to AFCA, and there is no risk of having to pay court costs. For further information on finance contracts and consumer credit legislation, see Chapter 5.7: Understanding credit and finance. What if a contract has not been cancelled or withdrawn fromproperly? If a contract has not been legally rescinded or withdrawn from, the purchaser may have wrongfully broken the contract. The effect of breaking a contract depends on whether or not the purchaser has already taken delivery of the car. If the purchaser refuses to take delivery of the car and is subsequently found to have breached the contract, the purchaser is liable to pay damages to the seller. ‘Damages’ are the loss the seller has suffered because the sale has not been completed. The seller must always attempt to minimise their loss. This requires the seller to use their best endeavours to sell the car to someone else. However, the purchaser is liable to compensate the seller for ‘the estimated loss directly and naturally resulting in the ordinary course of events’ from the breach (s 56(2) Goods Act). The seller must prove this ‘loss’ and does this by proving the non-recoverable loss of profit that resulted from the purchaser wrongfully breaking the contract (see Kargotich v Mustica [1973] WAR 167 and W & J Investments Ltd v Bunting [1984] NSWLR 331 for the method of assessing damages). When dealing with difficult sellers, it is important for purchasers to assert that they are only liable for nominal damages under section 56(2) of the Goods Act, as it may encourage the seller not to dispute the purchaser getting out of the contract. As mentioned, if the purchaser has already taken delivery of the car and they want to rescind or withdraw from the contract, they need to return the car and seek either a refund of money paid to the seller or a termination of the credit contract that financed the purchase. If you are in this situation, you should maintain credit contract payments until either the seller accepts the termination of the sale contract or an order is obtained from a court or VCAT. If you stop making payments and you are found not to have properly rescinded or withdrawn from the contract, you will be in default of the credit contract. Contacts Australian Financial Complaints Authority (AFCA) Tel: 1800 931 678 Email: info@afca.org.au Web: www.afca.org.au Consumer Affairs Victoria (CAV) Tel: 1300 558 181 Web: www.consumer.vic.gov.au CAV administers the Motor Car Traders’ Guarantee Fund. Consumer Action Law Centre Level 6, 179 Queen Street, Melbourne Vic 3000 Tel (consumer legal advice line): 1800 466 477 (Tuesday– Thursday, 10am to 1pm) Web: https://consumeraction.org.au Sample letters The following appendices contain sample letters that can be used in the following situations: • cancelling a car sale contract in the cooling-off period (appendix A); • ending a car sale contract because of failure of a condition precedent (appendix B); • rescinding a car sale contract (appendix C); and • withdrawing from a car sale contract (appendix D).