A Contract To Lease A Car
A Contract To Lease A Car
Contracts are promises that the law will enforce. A contract is formed by two parties, in which a promise is stated. Failure to complete this promise will be resolved by law. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the contract. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the other party. Contracts are mainly governed by state statutory, common law and private law. Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document.
Whether if realized or not, today’s society uses contracts everyday in order to maintain a fair and balanced social order. Usually these contracts are verbal, and not written, but when one needs to purchase something of great value, a written contract is an essential part of the business deal. Take a car for instance, committing to purchase/lease a car is extremely different then ordering a meal from a restaurant. Both are contracts but a cars value outweighs the value of a six dollar burger. When leasing an automobile a written contract is essential in order to execute the sale accordingly and efficiently. Contracts are made in order to provide protection and security for the lessee as well as the lessor.
I have decided to lease a two thousand and two Honda Accord from a local dealership. The lease agreement/contract has many important aspects that must be explained in order to ensure a successful leasing experience. The contract is broken down into sections that pertain to financial and personal aspects. The first section of the contract is personal information such as, name, address, telephone, etc. Of course this is to ensure the lessor, that you are legitimate. The next section covers the information about the car. Vehicle identification number (VIN), body style, color, etc. This is to make sure there is no discrepancy over what kind of car you agreed to, and what kind of car you will get come delivery date. For example, if you special order an artic blue super sports wagon with a CB, and the optional rally fun pack; you do not want to be responsible for a dark green family station wagon with no options. The next section basically tells us about the consumer leasing act. When you lease an automobile there is a federal law that will help you shop for the best deal. Consumer Leasing Act requires leasing companies to inform you of the facts about the cost and terms of their contract. You can use this information to compare one lease with another or to compare the cost of leasing verses buying the same property. The law also limits any extra payment you may have to make at the end of a lease and regulates lease advertising. You as an individual may sue a leasing company if it fails to give you the required information or does it in an improper manner. You may sue for up to 25% of the total of the monthly payments, but not less than $100 or more than $1000 plus any actual damages. If an advertisement violates the law, you may sue the leasing company for your actual damages. If you win the lawsuit, you are entitled to court costs and reasonable attorney's fees. You must file the suit within one year of the termination of the lease agreement. The next section is an itemization of the charges incurred during the lease process. This states the gross capital cost (over all total value of the car), capitalized cost and reduction, residual value, and the number of lease payments that incurred in the duration of the contract. In this case, I will be making thirty-six lease payments at two hundred forty-seven dollars and four cents. The contracts states the lease will be terminated after thirty-six months. The contract also makes it clear that I can incur some charges or penalties if I do not abide by the terms of the contract. These penalties are as follows. I am limited to twelve thousand miles per year; any additional miles will have a charge of fifteen cents per mile. Early termination of the lease will result in a breech of contract and will result in a substantial fine (so substantial they do not list it on the front of the contract, but the back in small print). Also excessive wear and tear to the car will result in a penalty or fine.
In addition to the “terms and conditions” part of the lease contract, I had to fill out separate sheet of paper called a: “excessive wear and use addendum.” This sheet had to be filled out by the two lessees’ in order to gain possession of the new vehicle. This addendum stated that we were fully aware of the charges that would be incurred if we did not abide by the rules of the contract. The three key elements are: Making payments on time, maintaining vehicle insurance for public liability and physical damage, and returning the car when the contract has ended.
The contract also assures to send me a monthly statement containing all my financial information about the current and past month lease. The anatomy of the monthly lease statement contains an account summary, an overview of my account status, (including lease number), vehicle identification number, payment information, and lease maturity date. The due date informs me when the monthly payment must reach Honda finance. The payment information box, is a detailed summary of previous month’s payment activity and current charges, including base payment and additional taxes or charges billed to my account. The monthly statement also contains a “amount enclosed” section which tells me my total monthly payment. All these components are part of the lease contract and should not be over-looked.
After reviewing the lease agreement, I have came to the conclusion that I am satisfied with all terms and conditions. The last part of the contract is the signature which will hold me responsible for all the terms and conditions printed on the contract. It is up to me to understand all material listed on the contract. After a signature is documented, I cannot go back and change any part of this agreement between me and the Honda dealer. All terms and conditions are set in stone and must be abided by or else I will fall into breach of the contract and penalties will apply.
A contract is the back bone to any business deal or transaction. A contract lists all terms and conditions that apply to the specific deal and should be looked at closely. Failure to “read the small print” could result in a miserable buying experience. This is why contracts are written and why they are an essential part of today’s society. Without contracts I would have had an oral agreement which could have been changed at any point in time because there was not a written document stating the terms and conditions of the lease. If the dealership wanted the car back, they could come to my house at eight-thirty in the morning and take my car, leaving me with no transportation. This example is why contracts need to be present in order to make society run more smoothly. Although the world is constantly changing, contracts will always be here to protect both the promisor and promisee from conflicts.