Tesla in Violation of Contract (Order Agreements)? A discussion

[bluewhite79]

Ok folks, let's have a conversation about Tesla's business practices and whether or not Tesla has violated our Contracts aka "order agreements". Many of us from 2021 are sitting around watching and waiting while builds are being sent off to other buyers. Often times, the exact build is sent to people who paid more "aka, added FSD". I don't know if this is a breach of contract, but it certainly feels like it. Tesla could argue that adding FSD is not your build and is therefore different.

First and foremost, I am not a contracts lawyer (or a lawyer at all), but maybe someone here is! Please chime in with your thoughts. All ideas are welcome.

My thoughts:

The "order agreements" are a contract between you and Tesla. When you placed your order, you made a contract with Tesla for them to complete a car for you at a certain price. It seems to me that Tesla has violated the agreement/contract by building cars for those who contracted with Tesla after ours (regardless of the reason). Is that true? I don't know.

Is this a "repudiation"?

Source:

Breach of Contract: Anticipatory Breach (Repudiation)

When one party to a contract indicates--either through words or actions--that it's not going to perform its contract obligations, the other party can immediately cla

www.nolo.com

When Does Repudiation Occur?​

Courts usually recognize three types of repudiation when it comes to contract law:

The property that is the subject of the deal is transferred to someone else. If the contract is for the sale of property, repudiation occurs when one party transfers (or makes a deal to transfer) the property to a third party. For example, if you've contracted to buy a house and you learn that the other party has subsequently sold it to his brother, your sales contract has been repudiated (even if you never heard a word about it from the other party).

 

[glide]

Ok folks, let's have a conversation about Tesla's business practices and whether or not Tesla has violated our Contracts aka "order agreements". Many of us from 2021 are sitting around watching and waiting while builds are being sent off to other buyers. Often times, the exact build is sent to people who paid more "aka, added FSD". I don't know if this is a breach of contract, but it certainly feels like it. Tesla could argue that adding FSD is not your build and is therefore different.

First and foremost, I am not a contracts lawyer (or a lawyer at all), but maybe someone here is! Please chime in with your thoughts. All ideas are welcome.

My thoughts:

The "order agreements" are a contract between you and Tesla. When you placed your order, you made a contract with Tesla for them to complete a car for you at a certain price. It seems to me that Tesla has violated the agreement/contract by building cars for those who contracted with Tesla after ours (regardless of the reason). Is that true? I don't know.

Is this a "repudiation"?

Source:

Breach of Contract: Anticipatory Breach (Repudiation)

When one party to a contract indicates--either through words or actions--that it's not going to perform its contract obligations, the other party can immediately cla

www.nolo.com

When Does Repudiation Occur?​

Courts usually recognize three types of repudiation when it comes to contract law:

The property that is the subject of the deal is transferred to someone else. If the contract is for the sale of property, repudiation occurs when one party transfers (or makes a deal to transfer) the property to a third party. For example, if you've contracted to buy a house and you learn that the other party has subsequently sold it to his brother, your sales contract has been repudiated (even if you never heard a word about it from the other party).

Where is the breach? Tesla presumably still intends to build and deliver your vehicle. They have no obligation to deliver your vehicle based on order date or order number.

Unless there is a time period mentioned in the agreement which has slipped, you have no recourse.

Even if there were a breach, all you are entitled to is the refund of your order fee.

 

[E90alex]

No. There is nothing that states Tesla will fulfill orders chronologically by order date or guarantee delivery by any date.

 

[bluewhite79]

Where is the breach? Tesla presumably still intends to build and deliver your vehicle. They have no obligation to deliver your vehicle based on order date or order number.

Unless there is a time period mentioned in the agreement which has slipped, you have no recourse.

Even if there were a breach, all you are entitled to is the refund of your order fee.

all good points. Not really talking about recourse right now. Just the question if it is/is not a breach.

 

[ajs847]

all good points. Not really talking about recourse right now. Just the question if it is/is not a breach.

Last year when I was freaking out over my order EDD's getting kicked all over the place I read the contract with fine tooth comb. Essentially you are giving them a fully refundable payment for the opportunity to own one of their cars. Tesla is under no obligation to deliver cars in any specific order or time frame and when you made the deposit their waiver ensures that you agree to that, so there is no recourse.

There would have been a massive class action by now if there was any recourse.

 

[bluewhite79]

People keep going back to "recourse". Fully understand recourse would be limited (probably). I also understand that their "get out of Jail, free" clauses in the contract don't generally hold up well in court.

But, trying to keep the conversation as "violation/no violation" and include your opinion either way.

 

[EVEnergy]

Plus, adding FSD which changed order ranking was an error, discovered by Tesla, and a fix was implemented a few months ago.

 

[bluewhite79]

Plus, adding FSD which changed order ranking was an error, discovered by Tesla, and a fix was implemented a few months ago.

We know this to be untrue and a falsehood. FSD's are getting filled in a couple of weeks or less once added to old orders.

 

[ajs847]

We know this to be untrue and a falsehood. FSD's are getting filled in a couple of weeks or less once added to old orders.

knowing through anecdote/ second hand is not the same as knowing to prove it, and either way, tesla is a corporation out to make a profit, if they want to fulfill orders with FSD first, it's their right.

to answer your original question and put this thread to bed so I can stop following it, there is no violation, you have no recourse. Elon can sell his cars to whoever he wants whenever he wants.

 

[bluewhite79]

knowing through anecdote/ second hand is not the same as knowing to prove it, and either way, tesla is a corporation out to make a profit, if they want to fulfill orders with FSD first, it's their right.

to answer your original question and put this thread to bed so I can stop following it, there is no violation, you have no recourse. Elon can sell his cars to whoever he wants whenever he wants.

It isn't anecdotal nor second hand. I can prove it.

Thank you for your opinion. I understand some people will have a strong response to it.

 

[glide]

all good points. Not really talking about recourse right now. Just the question if it is/is not a breach.

Again, I’ll ask what you think the breach is?

There isn’t one as far as I can tell based on how the purchase Agreement is worded. Is it frustrating to see others get their vehicle before you? Sure. Does it constitute breach of your agreement with Tesla? No.

 

[Zythryn]

all good points. Not really talking about recourse right now. Just the question if it is/is not a breach.

Then why do you respond to the comments about recourse, and not the comments about if it is/is not a breach?

 

[Suyog983]

Hi guys.. I agree that Tesla never said that they will fulfill the order in any chronological order or they have any obligation to complete the orders that gives them lower profits depending on the order date. and ofcrs they are in the market to make profit..

Just that it doesnt go with the entire picture.. when on one side you are talking so much bs about making world a better place by reducing pollution and other fancy promises when at the end of the day you just wanna print greens at the expense of others... if we are just going to accept it as a fact... its just bullying isnt it? again.. just a thought... Tesla need to do what is right.. not just for them but for all of us whos putting so much money into their accounts...

 

[bluewhite79]

Again, I’ll ask what you think the breach is?

There isn’t one as far as I can tell based on how the purchase Agreement is worded. Is it frustrating to see others get their vehicle before you? Sure. Does it constitute breach of your agreement with Tesla? No.

Again, thanks for your opinion. All are welcome.

I believe the breach is in the fact that I ordered an item "the Vehicle" and Tesla has so far refused to fulfill the order. The refusal is in the action and not the words.

I'm trying to think of a scenario in any contract where this is not a breach. If you need a fence built, and you contract with me, but then I don't fulfill the contract, is that a breach? The definition of repudiation (above/linked) seems to fit perfectly, but again, IANAL.

 

[lectriclexi]

I will argue there is no violation. Does not matter what is "right" or "fair." I work in manufacturing. When a client needs something faster, they often pay an expedited fee. This fee is sometimes double the original price. This fee moves your order to the front of the line ahead of anyone who didn't place an expedited order. To me, this is just normal business practice. I think where everyone is getting upset is that they aren't used to dealing with manufacturers. If you went to a dealership, you can only buy what is available to buy. If you make an order through that dealership for a custom order, you don't get to peek behind the curtain at what is going on. It is almost like we have too much information which leads to irritation and distrust. Is it a PR issue? Absolutely!!

 

[ZenRockGarden]

Again, thanks for your opinion. All are welcome.

I believe the breach is in the fact that I ordered an item "the Vehicle" and Tesla has so far refused to fulfill the order. The refusal is in the action and not the words.

I'm trying to think of a scenario in any contract where this is not a breach. If you need a fence built, and you contract with me, but then I don't fulfill the contract, is that a breach? The definition of repudiation (above/linked) seems to fit perfectly, but again, IANAL.

I've watched you spin this like 5 times in this thread.

Multiple well informed people explain that your contract is a deposit for a car from Tesla at a certain price. Period. The End. No assurance of delivery time, which customers go first, or how long you might have to wait.

You then ignore these simple facts and whine that you feel "something" has been violated. Challenged to explain what term of the contract is violated, you seem to want to claim that because your car has not arrived YET, there's some form of violation of getting you a car. Alas, the contract has no delivery date. In your fence analogy, you would have signed a price deal with a fence builder, given them a deposit, and they build your fence when they're ready. They are not ready. You didn't put a time limit in the contract. You can't sue them. Worst case, you might ask for your deposit back and basically cancel the contract.

We all agree that the way Tesla handles it's waiting list is both unclear, and sometimes unfair. It's also COMPLETELY within the terms of the contract.

Can we be done now?

 

[E90alex]

Again, thanks for your opinion. All are welcome.

I believe the breach is in the fact that I ordered an item "the Vehicle" and Tesla has so far refused to fulfill the order. The refusal is in the action and not the words.

I'm trying to think of a scenario in any contract where this is not a breach. If you need a fence built, and you contract with me, but then I don't fulfill the contract, is that a breach? The definition of repudiation (above/linked) seems to fit perfectly, but again, IANAL.

They have not refused to do so. Your order is still active and pending. They just haven’t gotten to it get. If they cancelled your order for no reason then that would be a refusal to fulfill your order but I’m sure the fine print also says they can cancel your order at their discretion for whatever reason.

Again read your order agreement and specify exactly which clause you feel they have breached.

There is none because as already said there was no guarantee in the order agreement specifying when your car would be made. Just that it will be made at some point.

 

[bluewhite79]

I will argue there is no violation. Does not matter what is "right" or "fair." I work in manufacturing. When a client needs something faster, they often pay an expedited fee. This fee is sometimes double the original price. This fee moves your order to the front of the line ahead of anyone who didn't place an expedited order. To me, this is just normal business practice. I think where everyone is getting upset is that they aren't used to dealing with manufacturers. If you went to a dealership, you can only buy what is available to buy. If you make an order through that dealership for a custom order, you don't get to peek behind the curtain at what is going on. It is almost like we have too much information which leads to irritation and distrust. Is it a PR issue? Absolutely!!

Very good opinion. Something I hadn't considered. Thanks!

 

[bluewhite79]

I've watched you spin this like 5 times in this thread.

Multiple well informed people explain that your contract is a deposit for a car from Tesla at a certain price. Period. The End. No assurance of delivery time, which customers go first, or how long you might have to wait.

You then ignore these simple facts and whine that you feel "something" has been violated. Challenged to explain what term of the contract is violated, you seem to want to claim that because your car has not arrived YET, there's some form of violation of getting you a car. Alas, the contract has no delivery date. In your fence analogy, you would have signed a price deal with a fence builder, given them a deposit, and they build your fence when they're ready. They are not ready. You didn't put a time limit in the contract. You can't sue them. Worst case, you might ask for your deposit back and basically cancel the contract.

We all agree that the way Tesla handles it's waiting list is both unclear, and sometimes unfair. It's also COMPLETELY within the terms of the contract.

Can we be done now?

Thanks for the input! Yes, you may leave the thread if you wish.

 

[ZenRockGarden]

Thanks for the input! Yes, you may leave the thread if you wish.

Uh yeah, I kinda don't need your permission to follow a thread or leave it. You might want to read the site contract terms on that topic too.