Can I Sue A Dealership If They Back Out Of A Sale?

Image: Getty

Well, friends here is yet another topic that I shall file under “things I thought were obvious,” but apparently there are a number of folks who think they have a legal case because a dealer for whatever reason did not sell them a car.

I’ve received a bunch of emails recently from folks who thought they had a deal lined up only to find out that the dealership either decided to sell the car to someone else or backed out of the deal for another reason.


The situations fall along the lines of the following -

I have a huge dilemma with a car dealership that is out of state. I am from California and the dealership is in Connecticut. I found a vehicle online listed at their dealership and I gave them $1,000 deposit and signed the contract via fax. They called me two days later and said that they had sold it to someone else minutes before I signed the contract and because they were so busy the 2 salesmen weren’t aware that they were selling the same car. Is the dealership bound by our contract? What are my rights? What about the fact that I won’t be able to find another vehicle at that price? I know it sounds stupid but that vehicle was $7,000 under Blue Book.

So the first thing this person should realize is that if the advertised vehicle really was “$7,000 under Blue Book,” it was probably too good to be true. Dealers are in the business of making money and if a car could retail for much more they aren’t going to sell it that cheaply out of the kindness of their hearts. Chances are there is a reason this car was far below the market average either due to an accident history or the current condition.

Furthermore, just because a buyer signed the contract doesn’t mean the deal is done. Both parties have to sign, so if the dealer didn’t do their part they are legally able to make that sale elsewhere. It sucks, but it happens. Think about it this way, if a dealer signed their contract, turned the document over to you and you didn’t like the terms you have the right to back out of the sale before you sign.


Speaking of contracts, often people confuse a written quote for a binding agreement.

I went to the dealership with a quote for a car. They told me it was a mistake after looking at the numbers and there is no way they can sell that car to me at that price. Someone must have misquoted the price based on a lower trim car. Don’t they have to sell me that car at the agreed-upon price if they told me in writing?


Mistakes do happen, people get the numbers wrong. Dealers play games. But at the end of the day, the customer didn’t make a purchase and there are no “damages” per se from a legal perspective other than some wasted time.

To get an official legal opinion, I contacted consumer protection attorney and friend of Jalopnik Steve Lehto who had this to say in regards to not honoring quotes -

In MOST states, this would not be a legally enforceable contract. Dealers routinely use purchase agreements, and THOSE are contracts (and usually are rife with language protecting the dealer).Dealers do this all the time. I get these questions a lot too. Just chalk it up to shady dealer tactics.


As I covered in a previous topic if you think the dealer tried to pull some bait and switch tactics with their advertising and failed to disclose their fees in the total cost. While you can’t sue them for damages, you do have the right as a consumer to file a complaint with the Federal Trade Commission who can levy enforcement action against that store.

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About the author

Tom McParland

Tom is a contributing writer for Jalopnik and runs He saves people money and takes the hassle out of buying or leasing a car. (