Verbal Agreement : Car Purchase

I have a bit of a query. My dad owns a commercial van, and was wishing to trade it in and buy a jeep.

So, he went to a garage (in Longford) and himself and the salesman agreed on a price. My dad said that he could pay there and then with a cheque, as he had his cheque-book with him.

The salesman said, if we can do this cash, you won't have to pay the VAT. If you pay by cheque, you have to pay VAT.

My dad (seeing a saving of €800+) said that he could get the cash from the bank, and come back when the vehicle was ready. Altogether, the jeep would be costing €4000 + his van.

Anyway, all was fine. My dad returned home.. and a few days later he got a call from the garage saying he would have to pay the €800+ VAT. My dad explained that he had been to the bank and got the cash, as the salesman had instructed, they had shook hands on this deal for €4k.

So, my question is, is a verbal agreement legally binding? They had shook hands and agreed a price ex. VAT. It was my dads understanding that the garage itself would absorb this amount, and accept the van + the payment as the total payment for the new vehicle.

I would love to hear your opinions please.

"The salesman said, if we can do this cash, you won't have to pay the VAT. If you pay by cheque, you have to pay VAT.

My dad (seeing a saving of €800+) said that he could get the cash from the bank, and come back when the vehicle was ready."

Picture your father in Court explaining to the Judge why he thought this was entirely above board and entirely legitimate. Then picture the scene as he asks the Judge to enforce what could be regarded as an illegal contract?

Do you get my drift?

mf

Ha he's a pure old farmer, he wouldnt have even thought about it being anything other than legal. Like I said, he assumed the VAT would be absorbed into the cost of things.

I have farmer relatives who could buy and sell me and still use the excuse of poor farmer!
For anything.
Mind you, I have an idea that country law is different to city law! I still don't think he has a legal case and suggest that he renegotiates on the price or goes elsewhere

mf

Smashbox said:

So, my question is, is a verbal agreement legally binding? They had shook hands and agreed a price ex. VAT. It was my dads understanding that the garage itself would absorb this amount, and accept the van + the payment as the total payment for the new vehicle.

I would love to hear your opinions please.

Click to expand...

You asked for my opinion, and you can have it: tax evasion is illegal; tax evasion is anti-social; it is an insult to tax-compliant people like me to seek our encouragement in such things.

Well surely the VAT would have had to have been paid anyway? I don't understand how the garage would have avoided paying this? I just thought that they had included it in the price quoted, and let on they were 'giving a little off'

AFAIK it is perfectly legal NOT to charge a customer VAT i.e. the VAT liability is with the seller.
It would be against the law for the seller not to account for and pay the Collector General the VAT due on the transaction.
As for the verbal agreement, old answer... is not worth the paper it's written on...

Crugers
Thats exactly the situation that he was in. He assumed the VAT was absorbed into the cost that they quoted.. like when buying a car, you are never quoted a price and then told its plus VAT (Well, I never have anyway!). You assume that the price quoted includes the VAT so that the garage makes their money and can pay the VAT out of that price.