The Case of Car Deposit Forfeiture: Understanding Seller’s Rights
- In a recent case, a car buyer placed a substantial deposit of 1 million baht upon the dealer’s request to finalize the purchase and take possession of the vehicle. However, the buyer ultimately refused to accept delivery of the car. The pivotal question arises: Does the seller hold the right to forfeit the entire 1 million baht deposit?
- Supreme Court Judgment No. 1383/2020 shed light on this matter. The contract to buy and sell cars outlined a condition for receiving the vehicle, stating an “estimated pick-up date” without specifying an exact calendar date. Consequently, as the contract lacked clarity regarding the payment deadline, the plaintiff, or seller, was obligated to provide the defendant, or buyer, with a reasonable notice period for payment. Since there was no evidence indicating such notification from the plaintiff or the defendant’s failure to deliver the car, the contract remained valid.
- When the defendant prompted the plaintiff to settle the outstanding amount and take possession of the car, the plaintiff refused, thereby breaching the contract. Consequently, the defendant was entitled to forfeit the deposit of 1 million baht. However, in accordance with the Unfair Contract Terms Act of 1997, Section 7, the forfeiture of deposits must be proportional to the actual damages incurred. Thus, considering the deposit amount vis-à-vis the car’s price and the defendant’s losses, the court ruled to reduce the forfeiture to 100,000 baht, with the remaining 900,000 baht to be refunded to the plaintiff.
- This issue falls under the jurisdiction of public order, empowering the Supreme Court to make a decision independently. Regarding the refunded deposit, the defendant was not liable for interest payments, as the breach of contract stemmed from the plaintiff’s actions.
- In conclusion, the judgment ordered the defendant to return the deposit of 900,000 baht to the plaintiff, aligning with the principles of fairness and proportionality outlined in the Unfair Contract Terms Act.