Conditional Sales Contract Car In Arizona
In Cavazos v. Holmes Tuttle Broadway Ford, Inc., 104 Ariz. 540, 456 P.2d 910 (1969), the first of the two documents executed by the purchaser and car dealer, the work order, contained a provision that the purchase would be subject to "Finance Company or Bank approval." 104 Ariz. at 541, 456 P.2d at 911.
The purchaser sought financing from her own credit union, and the dealer gave her possession of the new car pending financing approval and accepted her old car as a trade-in. Id.
When the credit application was rejected and the purchaser tried to return the new car and retrieve the old one, the dealer refused, asserting that the sale had been completed via the second document, a conditional sales contract, and the purchaser was obligated to pay for the new car pursuant to that agreement. Id. at 542, 456 P.2d at 912.
The purchaser sued in tort for conversion of her old car and the dealer pled the contract as a defense, alleging that it controlled the obligations of the parties and that the dealer was entitled under the contract to sell the old car. Id.
After finding that the contract between the parties encompassed both documents, the supreme court rejected the dealer's argument, concluding that the provision in the work order requiring credit approval made any contract contingent upon the purchaser obtaining a loan or, alternatively, the parties never agreed on the terms of a contract. Id. at 543, 456 P.2d at 913.
The court then held that "in either case there was no contract." Id.
Therefore, the court concluded, the dealer's sale of the old car was a conversion and the purchaser could maintain an action in tort for that act. Id.