- Helping you drive happy

12. Signing a contract

With a dealer
The contract is the binding element that ties one party to another. In these types of transactions, it defines obligations and recourse. It is therefore imperative that the contract state every possible element describing the transaction, its limits or exclusions and inclusions, if any.

Contents of the contract
In a dealer transaction, they will normally supply the paperwork. The document will contain areas for both the seller and the buyer's personal information, a description of the car including the serial number or VIN as well as details pertaining to the price paid, taxes and other fees. If the car is sold with a warranty, its details should be included.

In many Provinces, a car sold by a professional or dealer, automatically includes some form of minimal coverage for a set period of time or kilometres traveled. A dealer can typically not sell a car "without any warranties" or "As is" unless specific details are noted about the vehicle not being roadworthy.

With a private individual
Between private individuals, in many instances, it is not necessary however highly recommended, to have a documented contract. It should contain the vehicle's make, model, year, mileage, and most other details found in the contract.

Here also, the mention of warranty is important. A private individual can typically sell a car "without any warranties" or more commonly "As is." This then means that, upon signing the document, the buyers agrees to waive all recourse against the seller.

In any case, the inspection prior to signing the contract will have disclosed a crucial amount of information about the car's condition.

Important note: Before signing ANY contract, be sure to read the entire document. Putting your John Hancock on the document means that you ACCEPT and UNDERSTAND all clauses. In the event of a lawsuit against the seller, saying "I did not read the contract" or even "I didn't understand what I signed" will not stand up as a valid defence.




The final sales contract is the official binding document. In many provinces, once the contract is signed, there is no going back.

Contract with a dealer

Keep in mind that the final binding contract is the one that stipulates the method of payment. Unless you are paying cash, which is a rarity these days, the contract will refer to the type of loan and stipulate the following details and more:

  • Final sales price or amount to be financed - Interest rate or annual percentage rate (APR)
  • Duration of contract
  • Vehicle Identification Number
  • Down payment amount
  • Trade-in value
  • Monthly payment
  • Date of payment or schedule of payments
  • Details on credit insurance
  • Warranty information

There are many more particulars that need to be indicated in the final contract. If some are missing, wrongfully filed or mistaken, this could be sufficient grounds to annul said contract. In any event, if you plan on taking any type of action, consulting with a lawyer first is always highly recommended before taking matters into your own hands. For example, no longer making the monthly installments is a very poor idea.

Contract with a private individual

In this situation, financing does not apply. If the seller does offer some form of financing, the likelihood that you dealing with a curbsider rises; it may be time to re-evaluate what it is you are actually getting into.

You can use a napkin to write out a contract however we strongly suggest using our sample private sales contract or downloading one from the web.
The exclusion or inclusion of any type of warranty is the most vital element that will be touched upon. It limits or allows any or all types of recourse in the event that the seller's car turns out to be an absolute lemon.


On the day the Johnsons are expected to pick up their new acquisition, they make sure to have proof of insurance in hand in order to leave the lot with the Q7.

The Johnson parental units sit down with the salesperson and look over the contract. They ask questions on a few points including credit insurance and whether or not this is an open financing contract.
With everything looked over, as mister and misses Johnson will be joint owners, both appose their signature on the dotted lines.

As the dealer does not plate vehicles, the Johnsons head to the nearest department of motor vehicles to register the vehicle in their name. The dealer provides a temporary vehicle registration document that must be affixed to the vehicle which will allow them to circulate legally for a short period of time.

Once at the licensing office and with all the necessary documents in hand, the Johnsons can finally register their Audi Q7 and enjoy it to the fullest because they will have taken all the necessary steps and done their homework.