No doubt about the flexibility comment. Customer for life and referrals will likely be worth a lot more than $5k in the long run--I would definitely be a customer for life of this dealership group and will hopefully buy a Porsche WHEN (not IF!) the financial situation turns around.

 

Sorry to hear about your problems - the car is the least of them. I am a lawyer, but I must tell you that I know nothing about auto contract law or Ga. law so I cannot give you legal advice. That said, contracts must have mutual consideration. They will say that they ordered the car and that was the consideration. But they must order cars anyway so I think that won't hold water. And they have a duty to mitigate. If they lose money to sell it or if it sits in inventory and they have carrying costs, they could argue that the $5000 has been applied to that. As to price, that assumes they take a loss. And carrying costs are not instantaneous. They should at least have to refund the difference. They are entitled to the expected profit, not a $5000 windfall.

These observations are based on general principles. Ga law may have specific provisions or precident that addresses this more fully. You should consult a local attorney.

Failing that, file a claim in small claims court, (low cost and no lawyer) and start talking to local papers and tv stations. They often have consumer reporters and dealers hate bad press. And you are very sympathetic at the moment. It would make a good story, and the threat of that, and a call from a local reporter or two, might prove much more powerful than the law.

Best of luck to you for a speedy recovery and better financial times!

 

Thank you. Love your platinum silver car--that is the color I ordered too.

 

Real Sorry. I wish you the best of luck. I would hope the dealer would be understanding of your situation and, as long as the car sells within a reasonable amount of time, refunds your deposit. Keeping you as a potential customer, as well as doing you right for possible referrals can potentially do them a lot better than $5K.

 

If it's like the contract I signed at a dealer in GA, it basically says that if the purchase doesn't go through, the $5,000 serves as payment for damages. Both parties agree that there are damages, that they are hard to calculate with precision, and that $5,000 is an agreed estimate of those damages.

 

Bummedout:
There are costs associated with producing and selling a car which I'm sure you would agree people should be compensated for. Those costs are higher from initiation as the process goes on. Most of the dealer's cost are probably at initiation, but Porsche may charge the dealer for accepting the order so they can start managing the ordering of all the parts. At some point it gets to the point that they lock it in and start moving parts to staging locations. If someone stops the order at that point they would have the additional cost of sending / putting the parts back. I'm not sure what point they are at, but I'd get PNA involved quickly as they might be able to communicate with Germany to see what expenses have been incurred and then negotiate from there.

I like your idea of selling it before you get it. I would talk to the dealership about the cost of a "pass-through". That would be when you bring the substitute buyer in when you go to pick up the car and he buys it instead of you. In Texas they usually charge $250 when you are doing this when selling your trade-in through them to a third party (which in Texas at least reduces your sales tax). If the PNA effort doesn't work you might try that route. You might even put be able to put it on EBAY, especially if you got a discount off the purchase price and you've got something to work with. If the configuration is nice (or particularly affordable) people would be able to get the car they want with a first buyer status (important for LL), not have to wait (which is hard), get a car less expensive than a dealer speculation car (as they put many options on their cars) and get a little off the car. I'm not sure what the EBAY charges so you'll have to look into that also.

ChuckJ

 

I am licensed in Pennsylvania and Massachusetts only and it appears that the penalty flows from a liquidated damages clause. Georgia law in this regard is as follows (I am not licensed in Georgia and am not providing legal advise other than to recommend that you retain Georgia counsel):

7 Ga. Jur. Contracts § 5:105


Georgia Jurisprudence
Database updated December 2012

Business and Commercial Law: Contracts
Chapter 5. Performance or Breach
William H. Danne, Jr., J.D.

VII. Remedies
B. Damages
3. Liquidated Damages
a. In General

Chapter Summary Correlation Table Divisional References

§ 5:105. Test for enforceability

West's Key Number Digest

West's Key Number Digest, Contracts 321(1), 324, 355
West's Key Number Digest, Damages 74 to 77, 79, 80, 84 to 86


For a liquidated damages clause in a contract to be enforceable under the statutory provision governing liquidated damages,[FN1] three conditions must exist: (1) the injury caused by the breach must have been difficult or impossible of accurate estimation; (2) the parties must have intended to provide for damages rather than for a penalty; and (3) the sum stipulated must have been a reasonable preestimate of the probable loss.[FN2]
These three conditions must be met for a contractual provision requiring the payment of a stipulated sum by one of the parties upon the termination or cancellation of the contract to be treated as an enforceable liquidated damages clause, rather than as an unenforceable penalty.[FN3] Thus, the defaulting party can prove that a purported liquidated damages clause imposes an unenforceable penalty by showing that the injury caused by the breach of the contract was not difficult or impossible to accurately estimate, that the parties did not intend to provide for damages rather than a penalty, or that the sum stipulated by the parties was not a reasonable preestimate of the probable loss.[FN4]
Where only a portion of a liquidated damages clause is unenforceable, the offending portion may be struck from the contract and the other portions enforced if the contract contains a severability clause.[FN5]

CUMULATIVE SUPPLEMENT

Cases:

In order to show that the sum provided in a liquidated damages provision is a reasonable pre-estimate of the probable loss, as required for enforcement of the provision, the record must show evidence that prior to the execution of the agreement, the party seeking to enforce the provision endeavored to estimate damages resulting from a potential breach. JR Real Estate Development, LLC v. Cheeley Investment, L.P., 309 Ga. App. 250, 709 S.E.2d 577 (2011).
The Court of Appeals will enforce a liquidated damages clause if (1) the injury caused by the breach is difficult or impossible to estimate accurately, (2) the parties intended to provide for damages rather than a penalty, and (3) the stipulated sum is a reasonable estimate of the probable loss. Noons v. Holiday Hospitality Franchising, Inc., 307 Ga. App. 351, 705 S.E.2d 166 (2010).
Liquidated damages provisions are enforceable if: (1) the injury caused by the breach is difficult or impossible to estimate accurately; (2) the parties intended to provide for damages rather than a penalty; and (3) the sum stipulated is a reasonable pre-estimate of the probable loss. West's Ga.Code Ann. § 13–6–7. Mariner Health Care Management Company v. Sovereign Healthcare, LLC, 306 Ga. App. 873, 703 S.E.2d 687 (2010).
Injury caused by client's breach of contract with administrative services provider, provider's lost profits, was difficult to estimate, as required for enforcement of liquidated damages provision in contract; provider's officer stated that when parties entered into the contract it was impossible to estimate provider's lost profits in the event of a breach because its future costs were unknown due to variables such as inflation, labor market fluctuations, contract represented a new business venture for provider, and provider was using a new billing software system. West's Ga.Code Ann. § 13–6–7. Mariner Health Care Management Company v. Sovereign Healthcare, LLC, 306 Ga. App. 873, 703 S.E.2d 687 (2010).
Administrative services provider and client intended that liquidated damages provision in contract between them was not a penalty, as required for provision to be enforceable after client terminated contract early; contract specifically referred to the payment of "liquidated damages" in the event of an early termination by client, and officers who helped negotiate the contract for both sides stated that provision was meant to compensate provider for lost revenues in the event of early termination. West's Ga.Code Ann. § 13–6–7. Mariner Health Care Management Company v. Sovereign Healthcare, LLC, 306 Ga. App. 873, 703 S.E.2d 687 (2010).
A contractual provision requiring payment of a stipulated sum by one of the parties upon termination or cancellation of the contract will be treated as an enforceable liquidated damages provision rather than an unenforceable penalty only if the injury caused by the breach is difficult or impossible of accurate estimation, the parties intend to provide for damages rather than a penalty, and the stipulated sum is a reasonable pre-estimate of the probable loss resulting from such a breach. National Service Industries, Inc. v. Here To Serve Restaurants, Inc., 304 Ga. App. 98, 695 S.E.2d 669 (2010).
Contractual damages are enforceable liquidated damages if: (1) the injury caused by a breach of contract is difficult or impossible to estimate, (2) the parties intend to provide for damages and not a penalty, and (3) the sum stipulated is a reasonable pre-estimate of probable loss. West's Ga.Code Ann. § 13–6–7. Lancaster v. Susa Partnership, L.P., 300 Ga. App. 567, 685 S.E.2d 474 (2009).
Liquidated-damages clause will be enforced if (1) the injury caused by the breach is difficult or impossible to estimate accurately, (2) the parties intended to provide for damages rather than a penalty, and (3) the stipulated sum is a reasonable estimate of the probable loss. Antonios v. Gwinnett Clinic, Ltd., 668 S.E.2d 531 (Ga. Ct. App. 2008).
Before enforcing a liquidated damages clause, a trial court must determine whether the provision is, in fact, an enforceable pre-estimation of damages or an unenforceable penalty. Fuqua Const. Co., Inc. v. Pillar Development, Inc., 293 Ga. App. 462, 667 S.E.2d 633 (2008).
Liquidated damages clause is enforceable only if it meets each of the following requirements: first, the injury caused by the breach must be difficult or impossible of accurate estimation, second, the parties must intend to provide for damages rather than for a penalty, and third, the sum stipulated must be a reasonable pre-estimate of the probable loss. Fuqua Const. Co., Inc. v. Pillar Development, Inc., 293 Ga. App. 462, 667 S.E.2d 633 (2008).
A liquidated-damages provision in a contract is enforceable if (1) the injury caused by the breach is difficult or impossible to estimate accurately, (2) the parties intended to provide for damages rather than a penalty, and (3) the stipulated sum is a reasonable estimate of the probable loss. West's Ga.Code Ann. § 13–6–7. Turner v. Atlanta Girls School, Inc., 653 S.E.2d 380 (Ga. Ct. App. 2007).
Injury caused by parents' breach of contract for their daughter to attend a school was difficult or impossible to estimate accurately, as required for liquidated-damages provision in contract to be enforceable; school, which was not fully enrolled, operated at a fiscal loss, so each student's tuition was used to defray losses, and when contract was signed, impact that one student's withdrawal would have on overall financial condition could not be accurately estimated, as final enrollment and final budget for next school year was unknown. West's Ga.Code Ann. § 13–6–7. Turner v. Atlanta Girls School, Inc., 653 S.E.2d 380 (Ga. Ct. App. 2007).
Stipulated sum of one year's tuition was a reasonable estimate of probable loss from parents' breach of contract for their daughter to attend a school, as required for liquidated-damages provision in contract to be enforceable; school created a preliminary budget, including enrollment projections, for school year in which daughter was to attend, preliminary budget, with a projected operating deficit, was used to establish year's tuition rates, staffing needs, and teacher salaries, and withdrawal of a student would, absent liquidated-damages provision, result in a loss of expected tuition and an increase in school's deficit. West's Ga.Code Ann. § 13–6–7. Turner v. Atlanta Girls School, Inc., 653 S.E.2d 380 (Ga. Ct. App. 2007).
Liquidated-damages provision in a contract is unenforceable unless: (1) the injury is difficult or impossible to estimate, (2) the parties intend to provide for damages rather than a penalty, and (3) the liquidated-damages sum is a reasonable estimate of the probable loss. West's Ga.Code Ann. § 13–6–7. Lanier at McEver, L.P. v. Planners and Engineers Collaborative, Inc., 646 S.E.2d 505 (Ga. Ct. App. 2007).

[END OF SUPPLEMENT]


[FN1] O.C.G.A. 13-6-7, set forth in §§ 5:104, 5:109.
-
[FN2] AFLAC, Inc. v. Williams, 264 Ga. 351, 444 S.E.2d 314 (1994); Allied Informatics, Inc. v. Yeruva, 251 Ga. App. 404, 554 S.E.2d 550 (2001); Capricorn Systems, Inc. v. Pednekar, 248 Ga. App. 424, 546 S.E.2d 554 (2001); Swan Kang, Inc. v. Kang, 243 Ga. App. 684, 534 S.E.2d 145 (2000); Jamsky v. HPSC, Inc., 238 Ga. App. 447, 519 S.E.2d 246 (1999); Oasis Goodtime Emporium I, Inc. v. Cambridge Capital Group, Inc., 234 Ga. App. 641, 507 S.E.2d 823 (1998); Carter v. Tokai Financial Services, Inc., 231 Ga. App. 755, 500 S.E.2d 638, 35 U.C.C. Rep. Serv. 2d 916 (1998); Habif, Arogeti & Wynne, P.C. v. Baggett, 231 Ga. App. 289, 498 S.E.2d 346 (1998).
- As to the construction of liquidated damages provisions, generally, see §§ 5:112 to 5:114.
- As to the effect of the complexity of the procedure on the difficulty of accurate estimation, see § 5:106.
- As to the reasonableness of the preestimate of probable loss, generally, see § 5:106.
-
[FN3] Fickling and Walker Co. v. Giddens Const. Co., Inc., 258 Ga. 891, 376 S.E.2d 655 (1989); Manning & Associates Personnel, Inc. v. Trizec Properties, Inc., 212 Ga. App. 600, 442 S.E.2d 783 (1994); Broadcast Corp. of Georgia v. Subscription Television of Greater Atlanta, 177 Ga. App. 199, 338 S.E.2d 775 (1985).
-

Treatises and Practice Aids

Liquidated Damages; Penalties Distinguished. Hertz, Link, and Smith, Georgia Law of Damages § 6:2.

[FN4] Caincare, Inc. v. Ellison, 272 Ga. App. 190, 612 S.E.2d 47 (2005).
-
[FN5] Caincare, Inc. v. Ellison, 272 Ga. App. 190, 612 S.E.2d 47 (2005).
-


GAJUR CONTRACTS § 5:105

 

Why can't I get a response like that when I have a problem with my CD player on my Chrysler?

Do I need to pass an exam to understand all of that?

 

...bottom line...squeaky wheel gets a refund.....

 

Thanks!

OP - good luck!

 

Don't want to offend...but I would NEVER even think of putting down a $5K deposit on a car. I've been asked for a $1K one once but they didn't even cash the check I left for it. This is definitely a state by state thing, in Texas I'm pretty sure that there's no such thing as a non-refundable deposit and the "deal" is only consumated once the car arrives, financing/payment is received, and the vehicle changes hands. When I have been asked for a deposit (which really hasn't been that often and I've ordered quite a few cars) the Buyer's Order sheet that I have signed has always stated that the deposit is refundable. Like you, I have never ordered anything weird that wouldn't be easily sellable for the dealership if I backed down. That legalese post made my head hurt...but I think from what the Georgia consumer site said you're going to be appealing to the good will of the dealer principle. Don't give up, and do some of the things mentioned like appealing to the higher ups in the company for compassion.

 

Frankly, I don't see anything wrong with putting 5k down on a 100+k car. One just has to negotiate the damages provision in the contract. I had it amended to allow the dealer to obtain price damages after offering to sell at his normal discount in the event of my breach and limited my damages to the deposit. While I realize that I work with contracts every day...it's a $100K purchase guys, and you should spend a couple of hundred bucks for some legal advice before signing it....

 

Wow RNL--lots of great info even though it made my head hurt. Thank you.

Lots of other good advice and the response from this group has been unbelievable. I will let everyone know how it goes.

 

I guess we'll have to agree to disagree. In all but the tiniest of markets, the custom order a Porsche dealership makes is going to be using one of their allocations that would otherwise be a lot car, they're not really spending any "special money" on this.
I would side with the dealer if it was some super high dollar, heavy on the Porsche Exclusive options, purple with orange interior car, but for something more run of the mill which the OP already stated that it is, it seems shameful to me for the dealer to demand this. My first Porsche, a 2007 Cayman, was custom ordered to my spec by the local dealer with no deposit at all. A few weeks later, I changed my mind and bought a 2006 Cayman S they already had in stock and nothing at all was said about the ordered car. It came in when expected and they put it on their lot.

 

What many of my clients do not appreciate is that when they buy a car they are entering into a contract. A contract sets forth mutualities of obligations for the parties, that is, it sets the rules for what happens in the transaction. The default provisions of the contract spell out what happens if you or the dealer screws up. Now, if you do not pay for a car you purchased the dealer can sue you for his profit and in certain circumstances the measure of his damages may be limited if another buyer steps up and buys the car instead of you. That limitation may be inapplicable where a dealer has unlimited accessibility to cars to sell.

A well drafted contract can protect the buyer and limit his damages.

5k deposit? Again I don't see a problem. The salesman doesn't own the allocation the dealer does and the salesman's income comes from commissions. This dealer and salesman gave me everything I wanted by way of price concessions and deals. A negotiation is a two way street. I got what I wanted all they wanted was 10k. They accepted 5k.

You really don't want to screw with someone you may need. I just bought a Pse from them they gave me a substantial discount on the part and hours to install and extended that discount to a carbon fiber dash insert.

I realize that they see me as a customer and I am not their buddy. I am certainly not looking for another friend but I like the car and I want good service

I know a lot of "scorced earth" negotiators. I'm not in favor of that approach as you may want to revisit that patch of earth again