Even your best friend could turn you into a liability if you don’t keep a record of everything said and done. Dates, times and signed documents will all be used in the court of law because even friends will likely prefer to protect their property and assets than a friendship with you. Let’s face it, if you have an asset on one hand and a friend on the other, be honest, which one would you drop? Yes, it will depend on the type of asset and on the type of friend.
Imagine you have a friend who wants to sell you a car for… say, £5,000 which would probably cost you £7,000 with a car dealer. You make plans and anticipate a smooth transaction, swapping details, road tax, insurance and registration all sorted. Your friend’s insurance runs out on the 1st of August so you leave it until the 31st of July to get your new car insured and of course, to allow your friend one last day with their old car.
But you come up against a problem: your new insurance company cannot sell you the policy because you are not yet the legal owner of the new car. There’s a way around it, and that’s if your friend allows you to insure their car by giving you all the details the insurance company asks for. Your friend overlooked one important factor: you can’t buy a policy for a car owned by someone else. You tell your friend you were unable to buy the policy but your friend tells you on the 1st of August that because you left it to the last minute, you have to refund them for the policy they now have to renew. Moreover, your friend lost faith in you and cancelled the deal – you are no longer able to buy the car and you lost £500 as a penalty for “leaving it to the last minute and wasting my time”.
So what do you do? To keep the peace, you pay for your friend’s policy and find yourself looking for a new car. But you can also refuse to pay for your friend’s insurance and refuse to pay for any penalties because after all, it’s not your fault really, is it? But your friend is now very unhappy and claims that you are in breach of contract. Friends do take friends to court and if you do business with your friends based on trust, misunderstandings will break that trust and before too long you find yourself in court losing a battle because you didn’t keep a record of what was said, what was done, what was agreed and under which terms.
Your worst case scenario with your friend is being taken to court for breach of contract and being unable to prove even that you met your friend’s demands by paying their insurance in cash. Your friend will be after your assets. But your best case scenario is that you’ve kept a record of absolutely everything because when you entered into a verbal contractual agreement with your friend, you were shrewd enough to consult with a solicitor who helped you every step of the way.
Whether it’s a car, a house, a business, a solicitor can help you assess the situation and advise you on every aspect of buying and selling. Any deals, including buying and selling, needs the input of a solicitor because contractual relationships can get prickly and can go badly wrong. But a solicitor makes sure that you take wise steps and will advice you as well as benefit your friend, with legal rights and legal wrongs, will guide you both through the contractual process and will save both parties from potentially ruining a friendship and cause a deal to go sour. By Sandra Garcao
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