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Date Posted: 10:37:47 02/07/02 Thu
Author: GB
Subject: Invoices in who's name??? Who made the contract???

Straight from the horse's mouth...

Any contract dealer, whether here or on the continent, has written in their contract with the manufacturer that they will not supply any vehicles direct to a "re-seller". When a dealer submits an order to the manufacturer, and the manufacturer sees that this customer could be a re-seller (i.e. if the customer's name is "Auto Modena Limited" or "The We Sell Cars Company" or whatever, the manufacturer has the right, within 14 days of the customer signing the order, to refuse the order. That is stated in every "terms and conditions" of every manufacturer on the continent.

Therefore, theoretically, all invoices / deals that Automodena did should be as a broker only, and the dealer (on paper at least) should deal directly with the end customer. This means all invoices FROM THE DEALER should be written out to you, all official correspondance should be done with you etc. Automodena simply supply the dealer with the customer, take their commission from the dealer and the agency fees from the customer and that is that.

However, this makes the VAT issue more complicated. It would mean that the private customer (i.e. no VAT registered in UK) would have to pay VAT in Europe, import the car himself and then, on providing proof of payment of VAT in UK, claim back the VAT paid on the continent from the national authorities in that country. In order to avoid that, Automodena (and almost every other import company around) set up a second company, simply to register this one with the VAT office and be able to import cars without paying VAT... by doing this, it is the import company who have a contract with the dealer and the customer has a contract with the import company. If that import company goes bust, well tough (harsh but true).

I'm no legal brain, so I'm not sure what the stance is on proving Automodena were acting as an agent and therefore had a legal duty to pass on deposits etc to the dealer concerned but I do know this: why, if the contract was in YOUR name, did you not pay the person with whom you had the contract, i.e. the dealer in Belgium/holland/germany etc? I've had years of experience in this trade and I am pretty sure it will end up as follows:

Scenario 1: you have a contract/invoice in your name directly from the foreign dealer, and you have paid automodena the deposit / sum of the vehicle and not the dealer directly, then I am pretty sure that the money is gone. If I was a legal man, I would simply ask the question "why did you pay someone who had no right to any money?". Fair point.

Scenario 2: you have a contract with Auto Modena to supply you a specific vehicle. AM have obviously not fulfilled their contract and as they are liquidated it is then in the hands of the solicitors... so get yourself one too! But here you should get most of the money back, because the company has not fulfilled their contract.

And that is the key here... in scenario 1 you did not have a contract with AM so, as far as they are concerned, there is no problem. Scenario 2 is then different...

If anyone has any questions on this then please mail here and i will gladly answer.. I have a fair bit of practical experience in the area, also with AM, so know my way around a bit. Like I said, no legal brain but a lot of experience.

Good luck to you all....

GB

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