Do NOT try to buy an early employee Model 3 used any time soon....

[barjohn]

Restrictions on deeds on property have been around forever. You can't sell a property in violation of those restrictions so if you don't have a right to sell the buyer has no rights if he purchases in violation of those restrictions.

This appears to me to be modeled after real property law. For example, a buyer purchased a home with an HOA that restricts buyers from renting the home. He sells the home to an investor that wants to rent the home. Can the investor be restricted from renting the home? Absolutely! Suppose the investor says he didn't know about the restriction? He is still bound. He should have done his due diligence. Would a buyer buying a Tesla from an employee be expected to know that Tesla may have placed restrictions on the sale of a vehicle that is not yet available to the general public? Probably. I wouldn't want to foot the legal bill that would be required to test it.

Another example is a seller selling a stolen car. The seller has no right to sell. A buyer has no right to buy stolen property as his rights are derived from the seller's rights. In such a case the seller had no right to sell so the buyer had no right to buy. The original owner is entitled to have his item returned to him. The buyer can sue the seller to try and recover his loss but in most cases it isn't worth the effort or cost as the seller has nothing of value to reimburse the buyer with.

Before you paid someone over twice what you know an item is worth, wouldn't you want to be sure the seller was legitimate and that there were no restrictions on that sale? I certainly would. The old adage buyer beware certainly applies here!

 

[ModelNforNerd]

No that isn't true. The Tesla agreement says that they might do that if they sell the car for more than they paid for it. Not if it is "quickly flipped".

They could buy one today, and sell it to their friend, or a stranger, at cost tomorrow and there would be nothing Tesla could do under the agreement.

Sorry, most people would take "flipping" in this sense to mean "turning a quick profit on resale".

Saying "I flipped my Model 3 for extra cash" is the linguistic equivalent of ATM machine, or PIN number.

It's redundant.

 

[mond81]

How will they even track that? They could just fill out the bill of sale at MSRP and then get cash on the side... not like Tesla will have access to their bank accounts to see anyway...

 

[McRat]

That would be very interesting to see if Tesla would really gimp a car that changed ownership.

I doubt it, but heck, didn't they gimp legit owner's cars before?

Seems they had to un-gimp them, right?

 

[run-the-joules]

Analogy:

Let's make a deal.

I will sell you my 7,000 sq ft ocean-view home for the low price of $1,000,000. In exchange for the special purchase terms, we agree as follows: If you resell the house within 2 years, I get to burn your house down to the ground.

Do you think this would be OK because we had a contract stating this?

Once property is sold, it's sold. The new owner can do as he/she pleases.

Your analogy doesn't work because burning the house to the ground is a crime and an agreement doesn't change that. Tesla's relationship with their employees allows them to give them special privileges with substantial penalties for violation of terms.

The word you're looking for is "consideration", and it's absolutely enforceable in cases such as this.

Legal Dictionary - Law.com

 

[N5329K]

How will they even track that? They could just fill out the bill of sale at MSRP and then get cash on the side... not like Tesla will have access to their bank accounts to see anyway...

Many, many airplanes are sold for "$1 and other valuable considerations." So many that most buyers just put "$1 and OVC" on the transfer form.
Robin

 

[mond81]

Many, many airplanes are sold for "$1 and other valuable considerations." So many that most buyers just put "$1 and OVC" on the transfer form.
Robin

I know, but in CA the DMV doesn't let you get away with low numbers like that. Last I heard they will just up the value to blue book anyway when calculating the tax.

Plus would Tesla even have access to a DMV bill of sale?

You could sell it for MSRP and then charge a $5k 'consulting fee' ...or whatever. Contracts aside I don't even see how they'd be able to pull off the logistics of enforcing this...

 

[ModelNforNerd]

I know, but in CA the DMV doesn't let you get away with low numbers like that. Last I heard they will just up the value to blue book anyway when calculating the tax.

Plus would Tesla even have access to a DMV bill of sale?

You could sell it for MSRP and then charge a $5k 'consulting fee' ...or whatever. Contracts aside I don't even see how they'd be able to pull off the logistics of enforcing this...

Because you don't know what's on the beta builds of this software on these cars. Maybe the car won't pair with a non-Tesla approved cell phone. Meaning: you sell the car to someone, and they don't even get to use their phone to unlock it or use the app, they have to use the keycard. And if you try to pair it with an unapproved device, Tesla knows. These cars are telling EVERYTHING to the mothership right now.

 

[Carl]

Restrictions on deeds on property have been around forever. You can't sell a property in violation of those restrictions so if you don't have a right to sell the buyer has no rights if he purchases in violation of those restrictions.

This appears to me to be modeled after real property law. For example, a buyer purchased a home with an HOA that restricts buyers from renting the home. He sells the home to an investor that wants to rent the home. Can the investor be restricted from renting the home? Absolutely! Suppose the investor says he didn't know about the restriction? He is still bound. He should have done his due diligence. Would a buyer buying a Tesla from an employee be expected to know that Tesla may have placed restrictions on the sale of a vehicle that is not yet available to the general public? Probably. I wouldn't want to foot the legal bill that would be required to test it.

Another example is a seller selling a stolen car. The seller has no right to sell. A buyer has no right to buy stolen property as his rights are derived from the seller's rights. In such a case the seller had no right to sell so the buyer had no right to buy. The original owner is entitled to have his item returned to him. The buyer can sue the seller to try and recover his loss but in most cases it isn't worth the effort or cost as the seller has nothing of value to reimburse the buyer with.

Before you paid someone over twice what you know an item is worth, wouldn't you want to be sure the seller was legitimate and that there were no restrictions on that sale? I certainly would. The old adage buyer beware certainly applies here!

Probably depends on each legal system; I would think in most of Europe the following applies:
- buy a stolen car, in bad faith (i.e. knowing the car was stolen): 6 months to 5 years imprisonment, same as the thief himself. Car confiscated to pay for legal costs, of course.
- buy a stolen car, in good faith: the original owner can reclaim the car by paying the buyer the same price the buyer paid for the car (even if that were twice the price the original owner bought it for - obviously the original owner is not obliged to do that); no other recourse against the buyer;
- buy a s/h M3 from an employee in good faith (i.e. not knowing he was not allowed to sell on those terms, and frankly a buyer of a s/h car would have no due diligence duty on such matters, imho - such a buyer is not supposed to read all threads of the TMC forum): I do not think Tesla could restrict SuperCharger use, OTA updates or whatever else comes with the car, as those are things Tesla advertises as coming with the car (it's not a question of warranty, but rather what Tesla advertises as attributes coming with of the car, which Tesla must honor); Tesla can claim damages from the employee/seller but has no rights whatsoever vis-à-vis a bona fide buyer;
- buy a s/h M3 from an employee, in bad faith (i.e. knowing he was not allowed to sell on those terms): probably Tesla could simply stop the car from working ! (but of course Tesla would have the burden of proof that the buyer was in bad faith).

 

[Stolz25]

How would Tesla know how much you sold the car for?

 

[mond81]

Because you don't know what's on the beta builds of this software on these cars. Maybe the car won't pair with a non-Tesla approved cell phone. Meaning: you sell the car to someone, and they don't even get to use their phone to unlock it or use the app, they have to use the keycard. And if you try to pair it with an unapproved device, Tesla knows. These cars are telling EVERYTHING to the mothership right now.

I know they can track that it's sold, but can they track how much it's sold FOR...that is the question.

Since apparently the language is based on selling above MSRP or not. It's not a matter of them finding that it's sold. How will they know if it sold above MSRP or not?

 

[ModelNforNerd]

I know they can track that it's sold, but can they track how much it's sold FOR...that is the question.

Since apparently the language is based on selling above MSRP or not. It's not a matter of them finding that it's sold. How will they know if it sold above MSRP or not?

Well, normally, as others have pointed out, it would be up to Tesla to determine you acted in bad faith, but here....It's basically your job on the line, so it would behoove you to comply.


I'm sure someone is going to flip their car for serious cash once this agreement expires. But if the production ramp is quick, it will be a small window of time that you'll be able to maximize the profit.

Once they hit the market, people will be less likely to pay to jump the line.

 

[Alketi]

Recall that Ford Motor bought a founder's edition Model X and tore it down to reverse engineer it.

Why Did Ford Buy Tesla's Model X SUV?

$150K is a drop in the bucket to a competitor trying to reverse-engineer the car. It's a smart move for Tesla to reserve the right to brick or otherwise disable the employee models, and the potential for a competitor to buy one is likely one of the big reasons for the language.

 

[tomas]

I agree. I think there should be an "agree" rating and delete the "disagree" rating because it is confusing and does not lead to a dialogue to resolve disagreements.

Actually, "disagree" needs to be parsed out into several:
"I Disagree"
"I Hate your Post"
"I Hate You" and
"I Hate the World"