Ferrari 'DRM:' Don't Screw With Our Logos And We'll Let You Know If It's OK To Sell Your Car
from the an-agreement-is-just-another-kind-of-license dept
We’ve covered a lot of stories dealing with the Right of First Sale being undermined by digital goods being sold as licenses, rather than products. It’s much more rare to find the Right of First Sale being yanked away from paying customers who have purchased physical products. But it happens. You’d think shelling out a quarter-million dollars would allow you to do what you please with your purchase. Think again.
Apparently Ferrari was none to pleased with the custom badges and associated floor mats on Deadmau5’s 458 Italia Purrari. So much so that Ferrari North America sent the self-admitted button-pusher a cease and desist to have the custom emblems removed.
Deadmau5 (aka Joel Zimmerman) wrapped his 458 in a vinyl tribute to Nyan cat, running it in a few rallies and getting coffee with assorted celebrities and disgraced politicians before it went up for sale.
Deadmau5 didn’t share the actual cease and desist order but pointed out later that it specifically mentioned the badges and floor mats. Ferrari was probably none too thrilled with the custom wrap, which took the vaunted manufacturer’s luxury sportscar and turned it into a meme-on-wheels for the Gumball 3000 Rally.
First off, it seems a car company should let its customers customize their vehicles however they want to. Second, it was originally done for the Gumball 3000 — an event where all sorts of vehicles are wrapped/customized to ridiculous extents.
But that’s Ferrari’s m.o., apparently. Not only will it get testy about Pop Tart cats trailing rainbows, but it also won’t let you sell its vehicles without its permission. The Right of First Refusal contract (posted at a Porsche enthusiasts forum) states that Ferrari, not the customer, gets to say who the car gets sold to.
Customer recognizes that the 430 is a limited-edition, high-performance vehicle and that it is the goal of both Ferrari and the Dealer to offer and sell such vehicles principally to Ferrari enthusiasts who are purchasing the vehicles for their own use, who intend to use the 430 and not for purposes of resale or price speculation. Customer further recognizes that, in the past, Ferrari vehicles like the 430, have frequently appreciated in value, such that used and “almost new” vehicles can be sold at prices substantially in excess of the original Manufacturer’s Suggested Retail Price. While there is no guarantee that the 430 will enjoy similar customer acceptance, and while Ferrari and the Dealer recognize Customer’s ultimate right to enjoy any appreciation that may occur with respect to his/her vehicle, Customer acknowledges that Ferrari and Dealer have a legitimate interest in minimizing speculation in the 430, at least and the time of, and within reasonable time after, introduction of the vehicle. Customer, in particular, acknowledges that, in the past, excessive speculation in certain Ferrari vehicles has resulted in customer ill-will and can, under certain circumstances, expose Ferrari and/or Dealer to liabilities over which neither has control or recourse.
In order to address the foregoing concerns. Customer hereby grants to Dealer, as a material consideration for the opportunity to purchase a 430, an option to repurchase the 430 at its market value (but in no event more than the original Manufacturer’s Suggested Retail Price) at any time within two (2) years of the date of delivery of his/her 430, provided Customer decides to sell, lease or otherwise transfer possession the vehicle to a third-party during that period (the “Right of First Refusal”). Customer agrees to abide by this provision, and understands that, notwithstanding any other terms thereof, it constitutes an integrated and material part of the retail contract between Customer and Dealer.
To put this in the best light, Ferrari (and its licensed dealers) doesn’t desire for the rich to become richer by flipping its vehicles. It apparently wants customers to drive the cars, not buy up a few with the hopes of profiting on the price appreciation. It’s a noble thought, but it completely destroys the Right of First Sale. The contract says it recognizes the customer’s “right” to “enjoy any appreciation,” but then says the dealer gets first shot at repurchasing the Ferrari “at no higher than the “original MSRP.” How often this clause is actually triggered is unknown, but it basically takes control of a very expensive vehicle out of the customer’s hands for two years.
I’m not saying more money should mean more rights, but it would seem that those spending a small fortune for Ferrari’s vehicles should at least be able to paint the vehicle like the General Lee and sell it to old money in Mississippi without the owner having to check with the dealer first or receive ludicrous cease-and-desist orders.
Filed Under: 458 italia, deadmau5, first sale, ownership, purrari
Companies: ferarri
Comments on “Ferrari 'DRM:' Don't Screw With Our Logos And We'll Let You Know If It's OK To Sell Your Car”
I was just about to buy one of those, but now that I read this, I’m going to get a Dodge Dart instead.
So you buy a car that you can drive, but not sell. Doesn’t that make it a lease? At least for the first 2 years anyway as the contract states “within two (2) years of the date of delivery”
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You need to reread the CONTRACT. You can sell it any time you like, to Ferrari.
I expect most here are too young to remember, but when Porsche came out with the 959, you couldn’t purchase one unless you were already a previous Porsche owner.
“Having the money wasn’t enough, however. To qualify, you had to be a Porsche owner and promise not to sell your 959 for at least six months. You also had to be willing to travel: Sales and service were handled only from the Stuttgart factory.”
http://auto.howstuffworks.com/porsche-959-history2.htm
Doesn’t look like Ferrari is the first or only ones to do something similar.
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Doesn’t look like Ferrari is the first or only ones to do something similar.
The question is, is that the only model they did that with? Does the 458 have the same clause? What about all the rest of their models? The 959 was Porsche’s first supercar built in extremely tiny numbers. If Ferrari puts this clause in every sale contract, then it’s not really comparable. If it were only for the LaFerrari, then it would be a similar situation.
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Porsche only did it with one car so it is okay. Sounds like a fanbois.
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“You need to reread the CONTRACT. You can sell it any time you like, to Ferrari.”
My point was; They should just lease it for 2 years, then let you buy it. Write it up that way to begin with. You pay for it in full upfront, but you can turn it back in within 2 years and they will give you back fair market. If after 2 years you decide to keep it, its yours. They would be doing the same thing, but in a way that seems more “customer friendly” IMO
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But… that would require a decent level of honesty.
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Depending on how you read the contract, you may see it that way already. It is under lease for two years or don’t buy it.
How about
A license where I give you money for your product, but then I get to say where and on what can you spend it.
And if I don’t like you lobbying on some anti-consumer stuff, I can send a cease-and-desist letter for spending my money (that you licensed from me) on greasy palmed politicians.
I’d rather get a Tesla.
Re: Re:
or 3 of them…
How much for the paint job?
He agrees that they have first refusal on the car. But he can set whatever price he likes for the paint job, and have the two bundled together. They can then either pay him what he is after for the car and his “enhancements” or they can exercise their right to refuse to buy back the car. Storm in a tea cup either way.
Re: How much for the paint job?
Everything but the color was a wrap not paint.
yet another instance of copyright monopoly! even though the prices and produce are totally different, the manufacturer is still dictating what can and cannot be done with a legitimately paid for item! what is worse is the part where the ‘dealer has the right to purchase back the item before anyone else can have it and it must be at a price no higher than the dealer originally sold it for! downright taking the piss! i’ll be telling Ferrari to take a hike when i buy next high power, over-priced, head turning, ‘i’m a rich son of a bitch, motor vehicle!!
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yet another instance of copyright monopoly!
Except it has nothing to do with copyright.
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Yes, but it is, however, the same line of thinking. Setting terms on the use of a paid-for product to insulate a business from undesirable market actions is the same kind of thinking that copyright applies.
I’m just waiting for this to become standard In all products that retain or increase in value , because they own the patents or emblem copyright, It does give me a chuckle watching the rich attack the rich, live by the pen die by the pen , but I honestly don’t believe this has a chance In hell at being Ok’d in the courts.
Maybe he should have purchased a Tesla instead.
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I honestly don’t believe this has a chance In hell at being Ok’d in the courts.
First right of refusal is definitely something that can be granted by contract. I don’t see any reason this wouldn’t be enforceable (though IANAL).
Re: Re: The judge has to like it.
It might be viewed as against public policy. This is why you can’t contract for sex, even with your spouse.
Given the cost of these vehicles and who is buying them, these kinds of antics might not go over very well. This is one group of people that can actually defend themselves if they want.
Re: Re: Re: The judge has to like it.
It might be viewed as against public policy.
Right of first refusal in general, or for a car? If the former, no, that’s incorrect. If the latter, what’s different about a car?
Re: Re: Re:2 The judge has to like it.
The issue here is the right of first refusal at MSRP, right? You are dictating the price the customer has to sell it for. That is what I think he judge may not like.
this is a world gone mad. anybody know of a better or younger world that isn’t this way?
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Nobody on the sun acts like this.
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Heaven. I’m just dying to get there….
The contract provision is not inconsistent with what is generally termed the First Sale Doctrine. The doctrine is premised upon an unrestricted sale between a purchaser and seller, which is not the case in contracts containing a “Right of First Refusal” provision.
Re: Right of first refusal is common and a decent idea.
It can be structured in many ways. My condo board considered it as well.
For Ferrari, given their aims, it’s actually a great idea akin to anti-scalping rules for tickets, holding periods for securities, etc. If you want to stop short term speculators you lengthen the holding period to realize gains.
It prevents betting and enables enthusiasts and communities to grow healthily.
I don’t know of a better way to prevent jerks from gaming lines and trying to extract value from your customers. I as a vendor might want you to be able to purchase my goods for less than the maximum I can realize – because having a mix of purchasers is good for the community around my goods.
Re: Re: Right of first refusal is common and a decent idea.
I don’t know of a better way to prevent jerks from gaming lines and trying to extract value from your customers
Pricing the cars at what the market will support would not only prevent this, but also put more money in their pockets. If they immediately sell out special edition vehicles and their secondary market prices skyrocket, they under-priced the cars. I’m sure they are not under-pricing them in an attempt to keep their economical-friendly reputation afloat, they are under-pricing them because they stink at pricing.
Allowing a secondary market INCREASES the value of the cars. What they are doing is not only hurting the people “gaming” them by completely taking away the guessing game of car value speculation (which is CRAZY risky), but they are hurting the value of their product for the customers they actually want to sell them to.
Good plan – help the speculators by ensuring that there is no up-side to trying to flip the cars quickly and hurt the regular consumer by making their purchase less valuable. While this contract seems legal, it looks to me like a spectacularly stupid business move.
Re: Re: Right of first refusal is common and a decent idea.
“it’s actually a great idea akin to anti-scalping rules for tickets”
I take issue with the notion that anti-scalping rules are “a great idea”. They seem like a stupid idea to me.
So, the idiotic moron removed the mats and badges over a ridiculous demand? Deadmau5 is a total dweeb for removing that stuff.
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No, two different issues here.
Deadmau5 wrapped the car (removing the badges so the wrap would fit nicely) and changed some of the interior – including the original floor mats. Ferrari send him a nasty-gram for doing that. While I think the car looks horrible, he should have every right to do whatever he wants to a car he owns.
In addition to that, Ferrari has the stupid “you can’t re-sell our car” clause. Deadmau5 may be forced to sell the ugly car back to Ferrari, but as far as I can tell, he is not complaining about this clause at the moment.
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No, two different issues here.
kenichi tanaka reads an article, doesn’t comprehend it and then makes a silly, uninformed comment about it.
Par for the course.
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It’s not that he removed the badges so that the wrap would fit. It’s that he replaced them with customized versions that mimic the originals with the name “Purrari” in the same logo type instead of “Ferrari” on them.
http://99scenes.com/wordpress/wp-content/uploads/2014/06/deadmau5_purrari_2014.jpg
http://www.friendupmusic.com/uploads/1/2/6/6/12663123/4070749_orig.jpg
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It’s that he replaced them with customized versions that mimic the originals with the name “Purrari” in the same logo type instead of “Ferrari” on them.
I’m still not seeing how that is a problem at all. That might constitute a trademark infringement if he sold it, but I think that would be stretching the law a bit if you ask me. It’s not like he’s mass producing them.
It does remind me of a time in my youth where a friend had an ex-roommate abandon a car in his driveway. We changed it from a FORD to DORF with a claw hammer and some glue.
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2. Even if he did, there’s a good reason for it: not getting used by a big corporation with better lawyers.
3. Also, if a large component of your comment is insults, you automatically lose.
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Legal advice AND “dweeb spotting” – is there anything you can’t do?
Disgraceful but not disgraced
Quick little point about a single word in this story:
In the latest very frightening polls in the Toronto election, Rob Ford is likely to be re-elected. Thus, he remains disgraceful (as will the entire city if they actually re-elect him) but not disgraced.
Ferrari
From what I’ve read, Ferrari are pretty much dicks. I’ve heard they won’t even give the time of day to someone who doesn’t already own a Ferrari – if you want to buy a new one, you have to first buy a used one or they won’t even sell to you. They send ringers to car tests so you can’t believe any performance results unless they use a customer’s car. Sometimes they even send two cars, one for acceleration testing and one for handling. And by “send” I mean they bring along a mobile pit crew. And now this – sounds right in line with the rest of their behavior. If I had money to burn I would take it elsewhere.
All that being said, putting Nyan Cat-themed decals on a quarter-million dollar Ferrari is just wrong.
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“All that being said, putting Nyan Cat-themed decals on a quarter-million dollar Ferrari is just wrong.”
And yet, so right!
I think he should blow it up.
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I think he should market the theme for others to customize their own. Even if no one buys them, just releasing them for sale would be awesome.
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Not at all – performance art at its finest.
Next up – putting a jacked up wheelbase on one of these cars – like done for monster trucks.
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I think that blowing it up would be a great piece of performance art. He could sell tickets or offer Ferrari the Right of First Demolition.
you may recall the sad event of a former ferrari formula 1 mechanic/engineer dying in an odd early morning truck/pedestrian accident in southeast england not long ago. that fellow had been involved in an ugly spy episode with ferrari a few years ago.
i’m guessing the death was ruled accident or suicide, but i’ve kept my ear to the ground on that. may be a lot more to it, or may not.
While it’s a horrid practice, at least they seem to be relying on regular contract law instead of abusing copyright to force “agreements” down people’s throats.
Re: a horrid practice
Agreed.
I wouldn’t buy a car on terms like those.
But, I don’t have a problem with what Ferrari is doing here.
They’re using ordinary contract law to do something that IMHO is stupid, but fine – people have a right to be stupid.
Freedom doesn’t mean anything if it doesn’t include the right to do things that other people think are stupid.
Anyone who buys a car from them sees these terms (they don’t appear to be making any attempt to hide them), and agrees to it.
So…why is that a problem for anyone?
Re: Re: a horrid practice
Not a problem for me. Although if I actually ever see anyone driving one of these cars, I’m much more likely to think that they’re an idiot.
Re: Re: a horrid practice
It’s not a huge problem if it’s just Ferrari doing it.
The problem comes in when every major car company starts using the same language, so that you cannot buy ANY new car without agreeing to the insane terms.
Re: Re: Re: a horrid practice
The only time it would make much sense is when a car’s value is actually going to increase after it is sold. That’s pretty unusual because most auto-manufacturers are apparently better at pricing their cars than Ferrari.
Re: Re: Re:2 a horrid practice
The only time it would make much sense is when a car’s value is actually going to increase after it is sold.
Or if the contract basically says “we (the car company) get to decide what the fair market value is”.
Re: Re: Re:3 a horrid practice
That would almost certainly count as unconscionable in most jurisdictions.
Fiat Group currently produces vehicles under twelve brands: Abarth, Alfa Romeo, Chrysler, Dodge, Ferrari, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Ram Trucks, and SRT.
I wonder if this “Right of First Refusal” provision. is in all of their contracts.
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And wonder if you always. put extraneous periods in your sentences.
‘Cause that’s a better use of my time than waste a single thought about Ferrari or the ‘poor guys’ that have to wait 2 years before they can do anything they want with their car again. Boo-hoo, cry me a river.
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I wonder if this “Right of First Refusal” provision. is in all of their contracts.
You actually wonder that? You think maybe Jeep has first right of refusal on a new Wrangler?
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Don’t worry, they will always refuse to buy back one of those things.
He should have just left it alone. Held on to it until the 2 year period was done. Let the publicity over this drive the price up then sell it off to the highest bidder. And in the mean time taken it to every car show he could across the country.
Someone now needs to turn a Ferrari into an Art Car.
If I were in the receiving end of the letter I’d just rip it in pieces and carry on. Maybe send back a little note with “Bring it.” written all over.
The sense of entitlement of these people is astonishing.
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Yeah, I mean, how is “Ferrari sues famous Ferrari owner Deadmau5 going to play on the internet?” They’ll never sell a car to someone currently under 30 again…
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I don’t think they care. They only sell a handful of cars anyway (and only to Ferrari fanboys).
I read the story and almost spit my coffee on the monitor. Not because of what Ferrari is doing, but rather at the uppity anger and attitude of the author.
Simple deal here: If you want to “buy” a Ferrari, you do it under that contract. When Deadrodent dude pair for the car and signed the sales contract, it included that stipulation. Knowing that, he (a) still went ahead with the contract, and (b) promptly ignored it.
Ferrari has a line up of people out the door more than willing to obtain their cars under that arrangement. Quite simply, they make a CONDITIONAL SALE of the cars, and the clients have the right not to enter into that contract. There is no first sale doctrine issues here, it’s a conditional sale and not and outright sale.
Rather than getting all uppity about it, just remember: He signed on the dotted line, none of this should be a surprise to him.
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Hmm, I seem to recall that these abusive contracts that violate the first sale doctrine were deemed illegal by the courts? Maybe I’m wrong? Sure it seems to magically don’t apply when it’s on the Internet but as far as I’ve noticed it is pretty physical.
You see, I’ve BOUGHT the car. Ferrari doesn’t own and is not entitled to anything with it anymore. If I want to wreck it I will. If I want to paint it I will. If I want to sell it with paintings I will. End of the story. I can do it to cellphones why wouldn’t I do it to a goddamn car? Hope he challenges this in the courts for an easy win.
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It depends if you have truly bought the car, or if you have made a “conditional purchase” – essentially the actual sale does not occur completely until 2 years had passed. If the dead rodent had kept the car for two years (instead of trying to turn it for a profit), he would have been in the clear and could have sold it in any state that he chose to.
READ THE CONTRACT.
You see, I’ve BOUGHT the car. Ferrari doesn’t own and is not entitled to anything with it anymore.
Read the contract. Part of the sale is this agreement. After two years, he is in the clear. It’s not an open ended thing.
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READ THE CONTRACT.
You can shove the contract up your arse if it is abusive. The contract is not absolute.
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Of course, everyone should read (and understand) every contract they sign.
That said, however, contracts are often obfuscated and contain traps. No contract can really be trusted. Also, a contract is only as good as the lawyer you can afford to enforce it.
To just say “read the contract” as if that solves all the problems is to oversimplify.
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“I read the story…”
No, as usual, you didn’t. If you had, you’d realize the second part of the story about Ferrari’s conditions of sale had nothing to do with the first part of the story about Deadmaus’ 458.
“Rather than getting all uppity about it, just remember: He signed on the dotted line, none of this should be a surprise to him.”
Who said anything about a surprise? Just you, the uppity idiot. Next time, actually read the story before commenting.
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“But it’s the law, I have a contract, neener neener neener, go fuck yourself.”
Badges
I don’t think the wrap is what they are talking about. If you look at the video, before they do all of the add on things for the Gumball 3000 on the back of the car he had replaced the traditional Horse, with a small cat. Can’t tell on the front.
Re: Badges
Yes, replying to my own post. I don’t see where they have any legal complaint about taking the Horse off and the the cat on. Now if he had put a Ferrari horse on a VW, that seems like a trademark problem.
Re: Re: Badges
if he had put a Ferrari horse on a VW, that seems like a trademark problem
Only if he was then selling the VW as a Ferrari. Trademark is about consumer confusion. You can take the emblem off of a car and stick it on another one and not violate any trademark laws. You can build a replica of a car and use badges from an original – you just can’t try to sell it as an original.
Re: Re: Re: Badges
It is supposed to be about customer confusion, but the trademark owners have managed to push the idea rather a long way (although not as badly as copyright holders)
This will do wonders for their sales numbers. Buy it to ride, but not as an investment? Will this help Lamborghini or Aston Martin numbers?
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This will do wonders for their sales numbers.
Ferrari literally can sell as many cars as they feel like making. Most automakers try to estimate production based on how many people will want to buy the cars. Ferrari (and other small exotic car makers) decides how many they want to make, and always sells all of them. This will have no effect on sales.
FINALLY DRM and copyright on cars
this is gonna make people go ape crazy but soon everytime you open a car you will have to pay to use it…..
YOU WONT EVEN OWN YOUR CAR
see why obama and bush made gm and others go bankrupt then took them over with there lawyers.
Re: FINALLY DRM and copyright on cars
What is this i don’t even
Anticompetive Agreements
Really there should be laws preventing any anticompetitive contract clauses from being enforceable. Putting the break on resales, exclusivity contracts, all of that crap hurts the whole economy for a few actors. Which is something that we definitely cannot afford in addition to the obvious rights issue.
Hmmm, I you might carefully consider your qualifications before lecturing Ferrari on the optimal pricing strategy.
The Ferrari brand is the most important asset of the company. Not the factory, the designs or the inventory. They make far more on logo-wear, laptops, messenger bags, etc. than on selling cars. But all of that high-margin revenue goes away if the car brand fades.
They have obviously decided that the best way to maintain the value of the brand is to build high performance cars that are actively used, rather than jewelry.
Just buy a new Mustang or Corvette and be happy.
I see nothing wrong with a company requiring the right to buy the car back, sure it limits the owner, but that is in the contract.
You buy a house in an association, they can tell you what your house has to look like on the outside. They can tell you not to put in pools, fences or anything else.
You buy a condo, the condo association has to approve new buyers if you want to sell.
huba buba
I agree.
I think so too.
That’s hilarious
Standard stuff, really
This happens all the time in housing- can’t get a VHA loan without signing specific paperwork that says you won’t sell the house for at least a certain number of years, you have to actually LIVE in the house, and you can’t sell it for a profit when the time is expired. If you don’t like the terms of the loan, don’t take the loan. So why should it be so strange for a high-end car?
Re: Standard stuff, really
So why should it be so strange for a high-end car?
No other car maker does it*, so it’s almost the definition of strange.
* that I’ve ever heard of – if you know anything to the contrary do let me know
Cool post – liked video.
Car Pictures widescreen
Get latest Car Pictures widescreen free.
John Cena
I came across this thread after I learned that Ford sued John Cena after he sold his Ford GT. It’s interesting, because I was thinking that a clause that prohibits a buyer of a good from selling his car (or doing whatever he wants to do with it) is against public policy.
Link To pdf.yt Is Gone
There is supposedly a snapshot at archive.org here, but it doesn’t look right.