HaulingAss

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Did you see my post about the Model X owner's woes? It took Tesla months to buy back the vehicle after they had agreed to do so under the Lemon Law, and the law was on his side!

To my knowledge, there are no consumer-protection laws governing such "anti-resale" language in a sales contract.

A rational actor will generally behave reasonably, but the clause did not require Tesla to do so. It was badly worded, regardless of the broader intent.
Gus, you are missing some basic tenants of contract law vs. lemon law. When a consumer uses lemon laws, the onus is on the consumer to show they fall under lemon law protections. With the clause we saw in the purchase and sale agreement requiring the purchaser to notify Tesla of their intent to sell, the onus to take action (or lose their right to purchase) would fall on Tesla. They would have to excercise their right in a reasonable amount of time or else the consumer could not be found to have breached the contract if they sold to a third party.
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ive seen people suggest that people could have used bots, etc., to run on the CT order page

i havent thought that hard about it, but that suggestion strikes me as pretty implausible to be a successful solution

people running bots one, e.g., sneaker, wrist watch, concert ticket, and chip sales, have a vail between them and the seller of the postal services and credit card spoofing, etc. They only really need to fool the online order/payment end.

purchasing a vehicle, once it comes time to execute the deal, is a very different beast. even if you could solve for getting multiple loans (or even if you have cash on hand), does not solve for the issues with actually taking physical possession and title to several vehicles without it becoming abundantly clear that something is wrong in denmark

to say nothing of that fact that, for people who pay close attention to the secondary market of sneakers, watches, etc., those scalping enterprises are largely (but quietly) ENCOURAGED by the manufacturers - they create all kinds of corporate efficiencies that are the dirtly little secret of the luxury brand (or aspiring luxury brand) markets.



so personally, when i hear someone suggest cybertruck scalper acquisitions could be accomplished "like" the secondary markets for sneakers, chips, etc., i dont think too hard about it because they don't appear to have a very close appreciation for how *those* scalpers (and manufacturers) operate

Tesla could pretty easily uncover that sort of subterfuge, and in virtue of the subterfuge alone, identify the buyers as ill-intented, and simply not execute the contracts.

all abilities they had before, and irrelevant to, the advent of the additional features of this (dissapearing) provision
I agree with the luxury good scalping, to a lesser extent high demand consumer goods follow a similar theme.

But both the value and the demand side in the CT is unprecedented.

1 million x $50,000 is $50 billion or more. Those are big numbers and very likely to exceed the pool of buyers that are willing, let alone able without finance, to purchase a CT at a premium from a scalper.

There might be the demand of a million + orders, but that doesn't all result in purchases through scalpers, especially if finance companies calculate depreciation for residual value at the end of the term, and general affordability.

Accordingly, on top of all the rest of the math, I think the scalpers market size is significantly restrained in comparison anyway.

--

Just for clarity a 2FA over SMS means you need a mobile number for any oder you make, it's simple and common enough for anyone to do (you just send back the 6 digit sms code) and a good way to authenticate buyers from the beginning, which in turn will give them better demand projections from day one. It's not just a deterrent it's also a good way to get better data.
 

CyberGus

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Gus, you are missing some basic tenants of contract law vs. lemon law. When a consumer uses lemon laws, the onus is on the consumer to show they fall under lemon law protections. With the clause we saw in the purchase and sale agreement requiring the purchaser to notify Tesla of their intent to sell, the onus to take action (or lose their right to purchase) would fall on Tesla. They would have to excercise their right in a reasonable amount of time or else the consumer could not be found to have breached the contract if they sold to a third party.
The difference is with the Lemon Law, you can call the DA for enforcement assistance.

For a contract dispute, the DA will tell you “that’s a civil matter, hire a lawyer and take them to court.”
 

cvalue13

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I agree with the luxury good scalping, to a lesser extent high demand consumer goods follow a similar theme.

But both the value and the demand side in the CT is unprecedented.

1 million x $50,000 is $50 billion or more.
BAH!

if in 2019 Rolex opened up a GLOBAL “indication of interest” website that for $100 gave people the impression they were somehow “in line” for a rare watch?

Two things would be true:

(1) the “line”would have stretched around the globe, and

(2) Rolex would still only produce X number / year



multiply that “indication of interest” times notional MSRP, and it would far outstrip reality/annum (in 2019, Rolex sold $5B in watches, and serviced hardly anyone interested)


I think we’re playfully jabbing here. I playing the role (genuine to a degree), that thinks the whole “magnitude of people who expressed interest” is simultaneously good marketing claptrap, as well as wholly irrelevant to fundamentals of what Tesla makes on the CT.

Tesla could have gotten $100 from 1B people in 2019, and it doesn’t change one but how many they can sell in 2024, much less for $50-$90k


and for every person who believes/argues otherwise, it’s just an example of what good marketing claptrap it was!
 

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boutta find out! lol

Tesla Cybertruck ⛔️ NO RESALE language REMOVED for Cybertruck sales agreement! ✏️ 📄 Untitled
 


HaulingAss

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The difference is with the Lemon Law, you can call the DA for enforcement assistance.

For a contract dispute, the DA will tell you “that’s a civil matter, hire a lawyer and take them to court.”
Lemon Law is a civil matter too. If there is a contract dispute over the no-reselling clause we have seen, Tesla would have to sue you. Because if you notified Tesla of your intent to sell, and they don't pay you within a reasonable time, you can sell it to whover you want, without getting the courts involved. Do you think Tesla is dumb enough to sue you, after you have notified them of your intent to sell, and they never responded, and you finally sold it on the open market? Of course not, because it's obvious they would lose, as long as you have proof you gave them notice and they did not follow through according to the contractual terms.

The clause is not to screw over their customers, it's to cause flippers to cancel their orders so Tesla can work through the orders of genuine customers more quickly. Then they are likely to raise the prices on all the reservations made without an anticipated price listed.

The early bird gets the worm and the people who made Cybertruck reservations in bad faith (with the intention to profit from a flip) are the ones who lose. As you may recall, you agreed that the Cybertruck was being reserved for your own use, not to re-sell, when you made the reservation. It's pretty obvious there are a whole bunch of reservations made with the intent to re-sell. Those were made in bad faith and this is Tesla's solution to deal with them (assuming the clause is in the Cybertruck P&S Agreement).
 

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Lemon Law is a civil matter too.
IANAL, but I can read. Obviously laws vary by state, but one does need to hire a lawyer and sue to invoke the Lemon Law if the manufacturer refuses. In Texas, it's an administrative matter settled by the DMV. In Virginia, you file a complaint with the AG's office. Neither of these require a lawyer or going to court.

Because if you notified Tesla of your intent to sell, and they don't pay you within a reasonable time, you can sell it to whover you want, without getting the courts involved.
There was no such language in the document I saw. We agree it was poorly worded, and thus interpretation would be up to the judge you happen to be standing in front of.

Do you think Tesla is dumb enough to sue you
In a word, "yes". Tesla is not a single entity, it's people. If a dept of lawyers was tasked with enforcing the no-resale provision, then maybe they will be "reasonable", or maybe they want to show off to the boss just how good they are at their jobs. 🤷‍♂️

Of course not, because it's obvious they would lose
You and I have a different definition of the word "obvious"
 

HaulingAss

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There was no such language in the document I saw. We agree it was poorly worded, and thus interpretation would be up to the judge you happen to be standing in front of.
We don't agree it was poorly worded. It could have been worded with more clear specifics, but that is not necessarily as flexible or even better than a more general wording. When I earlier said it could have been worded "better", I should have said "it could have been worded more precisely, but that doesn't necessarily make it better". I know many people people believe that more specific is always better, but that is not true universially.

There can be very good reasons for wording a contract more generally, without a lot of specific absolutes. And this is one of those clauses that can achieve its purposes, (specifically benefiting both Tesla and sincere purchasers of Cybertrucks, while discouraging those who want to resell) without going into every detail. A principle that must be understood is how the law works. It's built upon past precedences that form the legal principles that are not codified in the law, but rather well understood "legal norms" that guide the interpretation of contracts. The more generally a contract is written, the more these legal principles come into play.

A contract designed to coerce people do something very specific that benefits the other party (vs. one designed to discourage people from taking advantage of a situation) must be written very specifically, very technically, so that these general legal principles don't come into play. In this case, Tesla is just looking for a mechanism to give their "no re-selling" clause some teeth. It's not going to kill Tesla if some people get around it and win, the idea is simply to prevent market chaos with people flipping left and right. A contract written in plain and simple terms, without too many specifics, can provide that function (discouraging flippers) without needing a lot of specifics.

In otherwords, the contract doesn't need to say you can sell your car on the open market if Tesla fails to purchase your car in a reasonable timeframe, because a whole host of legal principles would prevent Tesla from successfully taking action against you if Tesla did not diligently follow through in purchasing your vehicle in a timely manner. Tesla wrote the contract, and the legal onus would be on them to follow through on the purchase, or the clause becomes unenforceable.

This is just a lengthy way of explaining why it's silly to worry about Tesla delaying this process. Not only would it not benefit Tesla, but they would also lose legal standing if they delayed the process without a clear and sensible reason.
 

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Well that was short lived. Scalpers gotta scalp, I guess? I would have limited two CTs per person and you have to have a credit check run. I’ve heard of some people reserving 20+ CTs!
 


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Well that was short lived. Scalpers gotta scalp, I guess? I would have limited two CTs per person and you have to have a credit check run. I’ve heard of some people reserving 20+ CTs!
If you look at the document, the one with the Cybertruck clause was older than the "old" one that replaced it - we may have just seen a leaked draft that wasn't used publicly.

We don't know know what an actual contract for a Cybertruck looks like. There might be a newer version.

-Crissa
 

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Great news and good decision!
AGREED! Of course scalping for profit is bad, but many people (like me) had a buddy or relitive get a reservation for them. Seems unfair to cancel them now. Might be some other work around. for not-for-profit transfers, no?
 

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AGREED! Of course scalping for profit is bad, but many people (like me) had a buddy or relitive get a reservation for them. Seems unfair to cancel them now. Might be some other work around. for not-for-profit transfers, no?
If a buddy held the reservation, they could cosign the purchase, right? They are buddies, right?

-Crissa
 

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If a buddy held the reservation, they could cosign the purchase, right? They are buddies, right?

-Crissa
thanks for your reply.

YES, Not exactly sure what you are getting at here. I could project but please explain.
 
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Many companies have attempted to control the market for re-sale of their product. They have attempted to use copyright law or other contractual arrangements. The problem is that the laws of commerce favor the concept that if you bought it, you own it. If you legally possess it, its yours to do what you wish. If people cannot depend on a sale being final, then commerce quickly gets super-complicated.

If Tesla wants to reserve some interest in the truck after you buy it, then they are not selling it to you (fully). It will have to be treated accounting-wise more like a license agreement or maybe a lease. They will have to spread the recognition of the revenue over time. They won't get to recognize the revenue right away as they do with a straight sale.

They will also have to advertise appropriately, else get investigated for truth in advertising violations with the FTC. They cannot call it a "sale" when they are reserving an interest or control in your ownership of the vehicle.

Banks who finance vehicles are also going to weigh in on this issue. Its not good collateral to a loan if it cannot easily be liquidated for cash if they have to foreclose the loan.
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