"No Reseller" clause for Cybertruck

[Black306]

John Cena went into a contract with a 1yr/no-sell clause. Steve Lehto is also talking about people going into a contract with a 1yr/no-sell clause. Question still open is, how legally binding is a pre purchase contract without a 1yr/no-sell clause if/when Tesla decides to change the clause and add a 1yr/no-sell clause.

 

[stopcrazypp]

John Cena went into a contract with a 1yr/no-sell clause. Steve Lehto is also talking about people going into a contract with a 1yr/no-sell clause. Question still open is, how legally binding is a pre purchase contract without a 1yr/no-sell clause if/when Tesla decides to change the clause and add a 1yr/no-sell clause.

My understanding is the clause was in the MVPA, not just the preorder agreement. The MVPA would be the actual contract you sign during purchase. The current link by OP shows the order agreement it seems (not just a preorder one). I'm not sure however what it previously showed however as I didn't download the page.

The final terms of MVPA would govern the purchase when the time comes. The preorder agreement only has the order fee on the line (both you and Tesla are only liable for the order fee if either party defaults).

 

[SidetrackedSue]

John Cena went into a contract with a 1yr/no-sell clause. Steve Lehto is also talking about people going into a contract with a 1yr/no-sell clause. Question still open is, how legally binding is a pre purchase contract without a 1yr/no-sell clause if/when Tesla decides to change the clause and add a 1yr/no-sell clause.

The current reservation form includes this wording, and I have not seen anyone who has a long-standing reservation say it was not in their reservation document.

No Resellers; Discontinuation; Cancellation. Tesla and its affiliates sell cars directly to end-consumers, and we may unilaterally cancel any order that we believe has been made with a view toward resale of the Vehicle or that has otherwise been made in bad faith. We may also cancel your pre-order and refund your Pre-Order Payment if we discontinue a product, feature or option after the time you place your pre-order or if we determine that you are acting in bad faith.

That plus the refund of the $100 fee to join the list means that anyone who doesn't like the final terms can walk away without any cost to them except disappointment.

 

[zoomer0056]

My understanding is the clause was in the MVPA, not just the preorder agreement. The MVPA would be the actual contract you sign during purchase. The current link by OP shows the order agreement

Yup, when ordered, it's an Order Agreement (MVOA), not a Purchase Agreement (MVPA). This is a screen capture from that linked document:

 

[Black306]

My understanding is the clause was in the MVPA, not just the preorder agreement. The MVPA would be the actual contract you sign during purchase. The current link by OP shows the order agreement it seems (not just a preorder one). I'm not sure however what it previously showed however as I didn't download the page.

The final terms of MVPA would govern the purchase when the time comes. The preorder agreement only has the order fee on the line (both you and Tesla are only liable for the order fee if either party defaults).

I believe you’re missing the point I’m trying to make, so let me change the scenario a bit.

Say a pre purchase agreement stipulated a price; for example, “Cybertruck will be $60k, but due to unforeseen circumstances price may increase up to 10%.” People pay $100, which is a ‘consideration’ in contract law, and agree to those terms. If the price went up to $66k, that’s fine; it was stipulated in the contract. However, cause there is so much demand, Tesla decides to increase the price to $100k in the MVPA. Are they allowed to do that? I’m saying no.

Similarly speaking, there is a resellers clause in the pre purchase agreement, people entered into a contract with that clause, and Tesla is trying to change it. Terms in a pre purchase agreement should be legally binding towards the purchase of a vehicle. Question is, is it enforceable.

 

[stopcrazypp]

Yup, when ordered, it's an Order Agreement (MVOA), not a Purchase Agreement (MVPA). This is a screen capture from that linked document:
View attachment 991152

I don't know for sure if there is any actual difference between the two but I say MVPA because that is the only abbreviation lenders and the state incentives will recognize as proof of purchase. They don't recognize anything else. If I remember correctly (will have to check) the final version of that document only shows up when you get the VIN and is the only one that is legally binding in the end (all drafts before can be changed up to then).

For example, as mentioned in US order FAQ page.
www.tesla.com/support/delivery-day

 

[jjrandorin]

John Cena went into a contract with a 1yr/no-sell clause. Steve Lehto is also talking about people going into a contract with a 1yr/no-sell clause. Question still open is, how legally binding is a pre purchase contract without a 1yr/no-sell clause if/when Tesla decides to change the clause and add a 1yr/no-sell clause.

It isnt, since all you have is an agreement to purchase. They dont even have to offer you the same price, just like you dont have to complete the order, so there isnt any open question here to me. All anyone with a pre order has is a place in line to purchase at "to be agreed upon" terms.

 

[stopcrazypp]

I believe you’re missing the point I’m trying to make, so let me change the scenario a bit.

Say a pre purchase agreement stipulated a price; for example, “Cybertruck will be $60k, but due to unforeseen circumstances price may increase up to 10%.” People pay $100, which is a ‘consideration’ in contract law, and agree to those terms. If the price went up to $66k, that’s fine; it was stipulated in the contract. However, cause there is so much demand, Tesla decides to increase the price to $100k in the MVPA. Are they allowed to do that? I’m saying no.

Actually they are allowed to do that, Tesla doesn't promise a price nor a configuration in their preorder agreement. It is solely out of courtesy that Tesla honors previous prices for existing orders, but legally there is nothing that obligates them doing so. There are other brands like Rivian that raised prices for everyone and legally it's totally allowed, even though they got huge PR backlash.

Similarly speaking, there is a resellers clause in the pre purchase agreement, people entered into a contract with that clause, and Tesla is trying to change it. Terms in a pre purchase agreement should be legally binding towards the purchase of a vehicle. Question is, is it enforceable.

Yes it is, they are allowed to change the final order/purchase agreement however they want prior to you completing the purchase. If you don't like that, you can get your order fee back.

See the clause:
"Limitation of Liability. We are not liable for any general, incidental, special or consequential damages arising out of this Agreement. Your sole and exclusive remedy under this Agreement will be limited to reimbursement of your Order Fee, Order Deposit and Transportation Fee."

Basically when you get the VIN, you sign a different agreement that has all the final details (including the options and pricing of the vehicle).

Basically let it sink in your mind, the only compensation due to you for the preorder are the fees you paid. Tesla is not bound to sell you any specific vehicle at any specific price nor even bound to sell you anything at all.

 

[Black306]

It isnt, since all you have is an agreement to purchase. They dont even have to offer you the same price, just like you dont have to complete the order, so there isnt any open question here to me. All anyone with a pre order has is a place in line to purchase at "to be agreed upon" terms.

Pre purchase agreement is a contract. There are terms in a contract. You’re right, a person doesn’t have to complete an order but that’s in the contract.

And you're also right, there are to be agreed upon terms, like price. However, there were already "agreed upon terms" in the pre purchase contract.

Actually they are allowed to do that, Tesla doesn't promise a price nor a configuration in their preorder agreement. It is solely out of courtesy that Tesla honors previous prices for existing orders, but legally there is nothing that obligates them doing so. There are other brands like Rivian that raised prices for everyone and legally it's totally allowed, even though they got huge PR backlash.

Reread my post, then reply again. I said "Say a pre purchase agreement stipulated a price;..." So you're telling me that if there WAS a price in the pre order agreement, Tesla is allowed to change the price?

Haven't see Rivian's pre purchase agreement, but I'm willing to guess it does not stipulate a price. Which means they were legally alllowed to change it.

 

[zoomer0056]

I don't know for sure if there is any actual difference between the two but I say MVPA because that is the only abbreviation lenders and the state incentives will recognize as proof of purchase.

Exactly, we don't know what an MVPA looks like for the CT, no CT has been sold yet. But we're enjoying this conversation. Gonna be revealing as we get closer to lanch day in exactly two weeks.

 

[stopcrazypp]

Pre purchase agreement is a contract. There are terms in a contract. You’re right, a person doesn’t have to complete an order but that’s in the contract.
View attachment 991169


And you're also right, there are to be agreed upon terms, like price. However, there were already "agreed upon terms" in the pre purchase contract.




Reread my post, then reply again. I said "Say a pre purchase agreement stipulated a price;..." So you're telling me that if there WAS a price in the pre order agreement, Tesla is allowed to change the price?

Haven't see Rivian's pre purchase agreement, but I'm willing to guess it does not stipulate a price. Which means they were legally alllowed to change it.

Doesn't matter if the preorder stipulated a price because it says:
"any pre-order price provided to you in advance of the Final Price Sheet is only being offered to you as an estimate and is subject to change."

Again, the only legally binding price and configuration is what is in your final price sheet when you get assigned a VIN.

No automaker is going to be dumb enough to bind themselves to a price/configuration for only $100 when they may take a huge loss if the costs of production turns out to be much higher than anticipated (or if there is so much demand they can get more profits).

 

[Black306]

Doesn't matter if the preorder stipulated a price because it says:
"any pre-order price provided to you in advance of the Final Price Sheet is only being offered to you as an estimate and is subject to change."

Again, the only legally binding price and configuration is what is in your final price sheet when you get assigned a VIN.

No automaker is going to be dumb enough to bind themselves to a price/configuration for only $100 when they may take a huge loss if the costs if production turns out to be much higher than anticipated (or if there is so much demand they can get more profits).

Nevermind. You're not getting it. I'm focusing on agreed upon terms of a pre purchase contract and how they apply to the purchase of a vehicle. You're going into other tangents.

In my pre purchase contract scenario, there is an agreed upon price with a 'subject to change' of up to 10%. You're quoting something different.

 

[stopcrazypp]

Nevermind. You're not getting it. You're going into other tangents.

What tangents?

You said:
Reread my post, then reply again. I said "Say a pre purchase agreement stipulated a price;..." So you're telling me that if there WAS a price in the pre order agreement, Tesla is allowed to change the price?

The answer is yes they are allowed to do so according to the clause mentioned. What other clarification is needed?

And it's clear if they default, even without that clause, all they owe you is your order fee (and whatever fees you may have paid upfront).

Note their agreements say the following:
"Prior agreements, oral statements, negotiations, communications or representations about the Vehicle sold under this Agreement are superseded by this Agreement." That means when the time comes and you sign the MVPA, it supersedes any prior agreements. If you discover changes and refuse to sign, you are owed back your order fee (and any prepaid fees) and nothing else.

 

[Black306]

What tangents?

You said:
Reread my post, then reply again. I said "Say a pre purchase agreement stipulated a price;..." So you're telling me that if there WAS a price in the pre order agreement, Tesla is allowed to change the price?

The answer is yes they are allowed to do so according to the clause mentioned. What other clarification is needed?

And it's clear if they default, even without that clause, all they owe you is your order fee (and whatever fees you may have paid upfront).

Note their agreements say the following:
"Prior agreements, oral statements, negotiations, communications or representations about the Vehicle sold under this Agreement are superseded by this Agreement." That means when the time comes and you sign the MVPA, it supersedes any prior agreements. If you discover changes and refuse to sign, you are owed back your order fee (and any prepaid fees) and nothing else.

OK, let's try again.

Hypothetical situation. Forget the details in Tesla's agreement. A pre purchase agreement has a stipulated price of $60k with a 'subject to change' clause of up to 10%. There are no other "any pre-order price provided to you in advance of the Final Price Sheet is only being offered to you as an estimate and is subject to change." types of stipulations; price is locked into that range. Is the hypothetical company allowed to change the price above the stipulated range in a pre purchase agreement when drafting a purchase agreement? Yes or no.

 

[stopcrazypp]

OK, let's try again.

Hypothetical situation. Forget the details in Tesla's agreement. A pre purchase agreement has a stipulated price of $60k with a 'subject to change' clause of up to 10%. There are no other "any pre-order price provided to you in advance of the Final Price Sheet is only being offered to you as an estimate and is subject to change." types of stipulations; price is locked into that range. Is the hypothetical company allowed to change the price above the stipulated range in a pre purchase agreement when drafting a purchase agreement? Yes or no.

Yes they are, because when you go to sign the final agreement, it would supercede the prior one, and once you sign that one, the prepurchase agreement is voided.

But let's say you catch that before you sign the final agreement and refuse to do so. Then you look at what the terms are for either party for defaulting on the original prepurchase agreement. In this case, it's refunding you the order fee/deposit and any prior paid fees.

This is generally the case for preorders for any product in general. At most the retailer owes to back the preorder fee (in some jurisdictions maybe interest on the fee), but nothing else. There are some people that think instead by preordering, the retailer is now bound to deliver the product at the given price, no matter what (as if a court would order them to do so), but the reality is you were made "whole" already by the refunding of your money and the retailer owes nothing else in damages, if not agreed to prior.

 

[uscbucsfan]

Yes they are, because when you go to sign the final agreement, it would supercede the prior one, and once you sign that one, the prepurchase agreement is voided.

But let's say you catch that before you sign the final agreement and refuse to do so. Then you look at what the terms are for either party for defaulting on the original prepurchase agreement. In this case, it's refunding you the order fee/deposit and any prior paid fees.

This is generally the case for preorders for any product in general. At most the retailer owes to back the preorder fee (in some jurisdictions maybe interest on the fee), but nothing else. There are some people that think instead by preordering, the retailer is now bound to deliver the product at the given price, no matter what (as if a court would order them to do so), but the reality is you were made "whole" already by the refunding of your money and the retailer owes nothing else in damages, if not agreed to prior.

This is the correct answer.

 

[Black306]

Yes they are, because when you go to sign the final agreement, it would supercede the prior one, and once you sign that one, the prepurchase agreement is voided.

That's where we disagree. A pre purchase agreement is a contract. If a contract has stipulations on a sale price, the company is obligated to meet the terms of the contract and sell the widget at the pre purchase contract price. Outside of that price is a breach of contract.

 

[dakhlkt22]

That's where we disagree. A pre purchase agreement is a contract. If a contract has stipulations on a sale price, the company is obligated to meet the terms of the contract and sell the widget at the pre purchase contract price. Outside of that price is a breach of contract.

Contracts have remedies for breach of contract. It sounds like the remedy for seller's default on a prepurchase agreement is a refund of the $100 deposit.

 

[stopcrazypp]

That's where we disagree. A pre purchase agreement is a contract. If a contract has stipulations on a sale price, the company is obligated to meet the terms of the contract and sell the widget at the pre purchase contract price. Outside of that price is a breach of contract.

Contract can be modified and rescinded with the agreement of both parties. If you sign the final agreement you agree to the new terms. If you refuse to sign it and argue it is a breach of contract, as mentioned, you are owed a refund according to the original contract and that's it.

Let me ask you a question instead. What compensation were you expecting beyond that? Are you trying to say that Tesla must deliver the car at the given price no matter what (with no alternative remedy allowed)? Because that is clearly not what the prepurchase agreement says, nor have I heard of any similar terms in any preorder for products.

Contract law allows for defaulting on contracts (and the terms are typically specified in the contract itself, as it is here). People are not bound to follow them with no way to default. That seems to be a misconception by some people.

 

[zoomer0056]

A lot of hypothetical talk about changing the price listed on a CT MVOA. Was there a CT price listed in the Order Agreement?