Kallie from Kromboom wanted to know from SuperSpark how binding an offer to purchase is.  

He wrote,

Dear SuperSpark,  

How binding is an offer to purchase?

Eagerly awaiting your speedy reply.

Kind regards,

Kallie


SuperSpark replies:

Dear Kallie,

The offer to purchase (OTP) document is normally the first binding document that is signed between your dealership and the customer.

It is the document that highlights the salient points and agreements under which the sale would proceed. It encompasses what is expected from both parties, the seller as well as the buyer, to fulfil the sales agreement.

Legally binding
Therefore, if both parties sign the OTP, it becomes a legally binding agreement.

To illustrate the point, I would like to quote the ruling that one of our IDA Members received in a small claims court case in Knysna.

The complainant, in this case, ignored the complaint resolution as prescribed in the OTP and filed a claim against the dealership at the small claims court. After the Chair inspected the OTP, he gave a ruling in favour of the defendant.

In his ruling, he pointed out that the OTP was a legally binding document and that the complainant had not followed the rules as stipulated in the OTP. Therefore, he dismissed the case.

I need to compliment our Member for being well prepared by taking his deal file as part of his defence.

The lesson to be learned here, is to trust the rules and regulations as prescribed by your deal file, as this will steer you through the labyrinth of legislation when needed.

Happy sales, gotta fly now!

SuperSpark