Enforcement Of Binding Commitment

[Florida Guy]

I would like to hear from some attorneys on this issue. It is my understanding that for a contract to be enforceable there must be consideration on both sides. That is each side must provide something to the other. A contract for me to give you money without your promise to provide a good or service would not be enforced by the courts. How does this fact effect our promise to purchase an Elio autocycle if they have not promised to provide one? While it is true that they have promised us a $300 discount in exchange for our "binding commitment" would this be enforced by the courts since our contract with ELIO does not NOT provide us a promise to actual get a vehicle? Attorney answers please?

 

[Watashiwah]

I have a law degree although I do not presently practice. Although Contract Law is something that I have advised a few friends on my experience is limited.

With that said, it my unprofessional opinion that not only is this recent commitment 'unenforceable' but that this commitment would carry absolutely no weight whatsoever with the Department of Energy ATVM decision process. It is my belief that this new requirement is basked in misunderstanding and miscommunication.

 

[Marshall]

I would like to hear from some attorneys on this issue. It is my understanding that for a contract to be enforceable there must be consideration on both sides. That is each side must provide something to the other. A contract for me to give you money without your promise to provide a good or service would not be enforced by the courts. How does this fact effect our promise to purchase an Elio autocycle if they have not promised to provide one? While it is true that they have promised us a $300 discount in exchange for our "binding commitment" would this be enforced by the courts since our contract with ELIO does not NOT provide us a promise to actual get a vehicle? Attorney answers please?

I'm NOT AN ATTORNEY, but having dealt with purchase contracts for a living, there are many loopholes in the "binding" agreement. First, WHEN do you agree to purchase? WHEN do you agree to PAY? Without this, HOW can the courts enforce something NOT in the contract.

As I said before, this is for bureaucrats and not the courts.

 

[Eliofan]

The shirts and headphones you get are the consideration (something of value) which makes it a valid contract. But one that is practically unenforceable due to the high cost of collecting on it.

 

[xfired]

So can this option to purchase be sold?

 

[Rob Croson]

Elio Motors has an official process by which you can sell your all-in reservation. However, that reservation will lose their "spot in line", if they have one, and will get the next available spot at the end of the line. Which is now somewhere around 20,000.

 

[floydv]

Not legal advice, but a quick look at the "commitment" suggests it's structured in the form of an offtake agreement, enforceable only if Elio Motors actually produces a vehicle as described in the agreement. However, EM seems to acknowledge that the offtake agreement, by itself, is not fully enforceable when it references the need for a Purchase Agreement to further spell out the terms and conditions of an actual purchase for the vehicle.

Offtake agreements are valid contracts often used and entered into by a buyer and seller in advance of a good being produced or even before the factory is constructed. One of the main points for an offtake agreement is for the producer of a good to secure financing based on the promise that there will be a buyer or buyers for the good to be produced. It seems probable that EM is pursuing this approach to offtake agreements with committed buyers in reliance on discussions with the ATVM loan program analyst it's dealing with.

 

[Florida Guy]

The shirts and headphones you get are the consideration (something of value) which makes it a valid contract. But one that is practically unenforceable due to the high cost of collecting on it.

I did not see the shirt they sent out anywhere in the contract language I signed. Those of us that put money in before a few weeks ago did not get any headphones so that is not consideration to us.

 

[Rob Croson]

... but that this commitment would carry absolutely no weight whatsoever with the Department of Energy ATVM decision process. It is my belief that this new requirement is basked in misunderstanding and miscommunication.

This is the most ridiculous, trollish comment I've seen here in a while. If you really are a lawyer, then this is just proof that credentials don't imply competence, and are worth nothing more than the paper on which they're printed.

I would be absolutely gobsmacked if EM and the DoE didn't work this together to come up with a mutually agreeable approach to the DoE's requirements. I can practically guarantee that EM already had the DoEs commitment that the "locked in" program would be sufficient proof to meet their requirements.

People need to stop thinking about the DoE as some secretive, unapproachable, faceless agency with secret, unspecified requirements at which you are forced to guess and make blind stabs in the dark to try and fulfill. that's totally garbage. These government agencies don't work that way. Can they be ridiculously anal regarding requirement and paperwork? Hell yes. But they are also very cooperative in telling you those requirements, and providing details on what it takes to meet them.

1. It's the DoE's *job* to hand out that loan money to deserving companies that meet their requirements. If they don't hand out that money, then the program is evaluated as worthless, and they get defunded to the tune of several *billion* dollars. How likely do you think it is that the DoE wants *that* to happen?
2. Fact: DoE *asked* EM to apply for the ATVM loan. Do you really think they won't help EM meet the requirements?
3. Government agencies operating at this level are *nothing* like the local tinpot tyrants you usually deal with at various consumer levels, or local social/benefit program levels. If you haven't dealt with these bigwigs before, then you really can't have any concept of how they operate.
4. The DoE will be quite happy to work with EM to help them meet the requirements. There will certainly have been many conference calls, personal meetings, and LOTS of correspondence over the requirements and what is required to fulfill them.
5. EM applied to the ATVM loan program two years ago. EM and the DoE are both quite well-informed as to what each other is doing. The fact that *we* don't know what's happening between them means nothing.
6. The DoE just released the guidelines for start-ups applying for the ATVM loan program a mere two months ago. Who here is stupid enough to think that EM had no input into those guidelines? Or that they weren't written specifically with EM in mind?
7. Assuming that EM can meet the requirements, a successful loan and repayment would be a huge feather in the DoEs cap. This is career-making stuff, even for a gov't bureaucrat.

 

[TCBronson]

In my UN-official opinion Elio Motors would not have the time, energy or money to go after the thousands of individuals holding a reservation to try to enforce any agreement.