Question

Same facts as question 51. The contract is signed on a Saturday when the bank is closed. Josh wants to take the car with him and the dealer agrees since Josh made a $5,000 cash down payment. On Monday, the Bank of Planada checks Josh's credit and learns it is very bad. The bank will not approve Josh's credit and the dealer is unwilling to proceed with the deal.

1. Josh must return the car immediately.

2. Josh may keep the car as long as he makes the future payments.

3. The dealer will have to refund the $5,000 cash down payment.

4. 1 and 3.

Answer 1

The correct option is 4 " 1 and 3"

If the bank of Planada cancels the agreement on the monday seeing the Josh credit history then, Josh is liable to return the car and the dealer will have to return the down payment according to 10-Day rule. Which says that the dealer can cancel the contract if he notifies within the 10 days of the agreement and in this case, it is less than 10 days. So, Josh would be obligated to return the car and receive the down payment from the dealer.