Whenever I hear or read this I know life is going to be difficult. It almost always means that the consumer is completely out of luck.
We recently got the following enquiry from a member of our Facebook group.
“Hello, I was wondering if you could give me advice. I had a verbal agreement with someone early in December 2016 to sell him my car for P20 000 and he was supposed to pay the full amount by then end of December 2016. He has been telling us he is expecting money from somewhere to pay but of lately he is not picking my calls, he reads and ignores my messages including Whatsapp messages. And today I decided to call his girlfriend asking her to talk to him for me. I then received a call from him saying he is returning the car as it was giving him problems. So my worry is what if the car is no longer in a good condition?”So you gave away your car to someone who didn’t pay you any money up front? You gave him your car without any record of any agreement between the two of you explaining who now owned it, how much he would pay and the conditions of the sale? And now he’s going to return it with mechanical problems?
Congratulations, you just lent someone your car for several months and he broke it.
And that’s the end of it.
The lack of a written agreement means there is no court that will help you. There is nothing to prove that you didn’t just lend him the vehicle. Even the least reputable attorney will probably suggest that you take back the car and live with the disappointment.
Another reader had a more complicated issue. She said:
“Hello Richard I have an issue with my ex landlord that I need advice on. She is refusing to repay my security deposit. I moved into the house in March 2015 and signed a lease agreement that stipulated that rents increases by 10% every year. Now during the signing of the lease the landlord verbally said that she won't increase rent after the first year. I moved out of the house in December after staying in the house for 1 year + 6 months. Now my landlord has gone back on her word and says I should back pay all the 10% increments from March 2016 which marks my one year stay in the house. So my question is do I really have to pay her all the 10% increments even though verbally she had said she won’t increase rent after the first year and in the past six months not once has she complained that I'm not paying the increased amount. It is only now that I have moved out of the house and I want my security back that she is bringing this up.”Yes, I’m sorry, but you DO have to pay her the increments because that’s what you agreed to do. In writing. The so-called verbal agreement you had with the landlord doesn’t exist. It’s only a memory from two years ago. The only record is in your head and that doesn’t qualify as evidence that a court would listen to, particularly when there’s a written agreement that says something different. In fact, a court isn’t even allowed to consider your verbal agreement. The “parol rule” of evidence says that “when a transaction has been reduced into writing, the writing is regarded as the exclusive memorial of the transaction and no evidence may be given to contradict, alter, add or vary its terms”.
A verbal agreement that contradicts a written agreement doesn’t exist. It’s not an agreement at all. Forget it, it effectively didn’t happen.
Here’s a final example.
A consumer came to our office a couple of years ago and asked for our help in reclaiming some money she’d lent to a guy. He’d been a regular customer in her store and she’d grown to know him fairly well. But only as a customer, nothing more that I know of.
One time he’d asked her if she could lend him some money. Yes, I know, your alarm bells are ringing, aren’t they? Would you hand over money to someone like this? I know I wouldn’t.
Anyway, she said yes and they went to the bank to transfer the money he wanted from her account directly into his.
And that was the last she saw of her money. It was more than a year later that she came to us and he had now gone quiet on her. What could she do, she wanted to know?
I put my metaphorical amateur detective hat on and started asking some questions. When, who, where and above all, how much? How much had she lent him?
“One point five”, she told me.
Ok, I thought to myself, that’s hardly the end of the world, is it? It’s not a sum that’s going to ruin her, I thought.
But then I realised. She didn’t mean one point five thousand Pula. She meant one point five million. One and a half million Pula. To a guy she barely knew. And with no written agreement.
I think she must have realised from my face (I’m not that good an actor) that I was stunned. Rendered speechless. I promise you I did NOT use the phrase “Why does your mother allow you out alone?”
Please, I beg you to learn this very simple lesson. It won’t always solve every problem but it will go a very long way to help you if you get every financial transaction in writing. Everything. When you lend someone money, sell your car, even when you sell an old phone to an acquaintance, put the agreement in writing. You’ll thank me, I promise.