Legal Question in Consumer Law in New Jersey

I engaged a company online to obtain a Michigan auto wholesalers license for me, so I could legally resell autos purchased at auction in my state (NJ). I was told in the sales email that they would obtain the license for me, and I was to pay them a licensing fee ($450, discounted from the usual $500), along with an ongoing monthly rent ($300) for space in their Michigan facility in order to maintain the license, as well as an estimate of the associated annual insurance costs ($1800-2200). After paying the 'application fee', and signing the required credit card authorization form and attached lease (which didn't have a commencement date, and which I assumed at the time wouldn't commence until I received the license), I received a receipt indicating that the money was in fact applied to rent and deposit, not a license fee. And two weeks later I was charged another months rent, even before providing me with the initial license application! Then the insurance estimate they provided was twice the estimated amount($3450), and after shopping for competitive bids I discovered that I couldn't find a 3rd party insurer to even write that policy (with the licensed business address in MI and the actual transactions taking place in NJ). During this time they charged my card with another months 'rent', even before having submitted my application to the state. At this point I realized that this was probably a scam and notified them via email that I no longer wanted to do business with them and requested a refund, at which time they refused, referring to a clause in the lease requiring a 30 day written cancellation notice. I believe that they breached our contract by misrepresenting the associated costs, and attempting to provide a legally questionable and overpriced insurance policy that I couldn't obtain from a legitimate outside source, and therefore the lease I did sign should be null and void.

My question is: is my argument that the technicality of the signed lease be nullified, given the other circumstances of this transaction, e.g. that I was actually purchasing a license, and the lease was just a component of that transaction, which was never actually consummated, and also the deceptive methods employed to get me to sign said lease (discrepancy between the facts stated in the sales email vs the subsequent receipt)?

Asked on 11/19/12, 9:40 am

1 Answer from Attorneys

John Corbett Corbett Law Firm LLC
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It sounds as if you have several good causes of action. I question even why you would need a Michigan wholesaler's license if you were not selling in Michican. If you think that the company has assets from which a judgment can be collected, call and we can discuss it. Meanwhile, you will probably want to stop the credit card charges.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 11/19/12, 10:17 am

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