Cybertruck and Terms of Use

Observant citizens in the USA have noticed that Tesla has rolled out new conditions for the sale of Tesla cars (Motor Vehicle Order Terms & Conditions, see PDF), which are posted on the company's website and are available for review when ordering cars. Since the American legal community has long since mastered the technique of separating individual contract terms into paragraphs, it was easy for readers to notice the section under the heading “Cybertruck Only”.

But instead of congratulating buyers of Tesla's most innovative and nearly armored pickup truck with a good choice and promising a blue checkmark in the X (Twitter) as a gift with the purchase, it stated that:

• Cars will first be released in limited quantities (Tesla buyers with non-deployed airbags are already used to standing in line, so nothing new);
• Cybertruck buyers are prohibited from selling the car within a year from the date of its delivery (and this is something new).

More specifically, Tesla says it has a pre-emptive right to buy back the Cybertruck at the purchase price, less wear and tear (25 cents per mile). If the respected company refuses to buy back the car, the sale to a third party is possible only with Tesla's written consent.

In order to further motivate buyers go to the office instead of the remote work not to resell the Cybertruck, they added sanctions in the form of:

• the possibility of seeking a injunctive relief by preventing the sale of a car;
• the possibility of collecting the amount of liquidated damages (adored by lawyers of the continental legal system) in the amount of 50k USD or the value of the car at the time of sale, whichever is greater;
• refusal to sell the buyer any other Tesla cars in the future (there could also be a ban on viewing Musk's Twitter page, but this can be easily achieved without purchasing a Tesla).

While some people began to complain, supporters of Elon's, the son of Errol talent, pointed out that such conditions logically prevent the work of resellers, who will try to resell the limited product at a premium in the first months (remember the good times when people went to Berlin and London for iPhones, so that later throw them on o-el-x?) and in general this is a normal distribution control.

Undoubtedly, there is a ratio in this opinion, something like a tax on the second sale of a car within a year in Ukraine, yes. In addition, if you delve into the practice of the USA regarding “no-resell” contracts, it will turn out that Tesla did not invent something unique – similar restrictions exist in the market of cars produced in limited batches (for example, super- or hypercars), and even among of electric pickups, Tesla is not the first, because Ford had a somewhat similar story with the F-150 Lightning (if you want an analysis of these cases, write in the comments).

But the fact that such conditions appeared at a time when pre-production Tesla cars are already regularly spotted on US roads adds to the spice, and since the summer, there have been a number of reviews that the cybertruck is a little off-putting – it does not meet expectations. The press also wrote about it, and Musk himself openly stated this back in August of this year.

Although the public admission of mistakes is a good management and media move by comrade Musk, Tesla's lawyers acted like lawyers – they proposed amendments to the contract and inadvertently (yeah, of course) took presumably dissatisfied Cybertruck buyers by the … wallet (the gills somehow do not fit, and the other options do not fit into the framework official business style, which I hope this text is not written in). “Like it or not – it's your duty, my beauty (at least for a year)” – as one sleazy Elon's pen pal would say.

The elegance of such a step can be further emphasized by the fact that such a ban obviously affects the picture for the company's investors in the perspective of the year, since the company's Shareholder Deck indicates the number of cars produced and sold and does not contain information about the refusal of cars or their buyback by the manufacturer (which can and will not happen, judging by the conditions described above).

Since I am not the target audience of the Cybertruck (and they will not be useful to the Armed Forces either – the filler neck for the diesel engine is inconveniently located), I will no longer think about the fairness of such conditions or Tesla's intentions. But I'm definitely for the beauty of the game and Tesla's lawyers played beautifully – in one paragraph, they solved several important issues of launching a new product, which are measured by many zeros before the comma. The case when an offer is posted on the website is not just “just in case”, “well, put some plug in the basement of the website”.

Disclaimer for nerdy lawyers: I am aware that consumer case law and related legislation are all over similar stories with offers, both in fine print, in CAPS paragraphs, in boxes, etc., and in respect of sewn-in arbitration clauses – nothing new globally happened, just a bright, with a metallic sheen, a business case. We can talk about problems, challenges and modern approaches to reforming the offer construction industry at the corresponding symposium over a glass of Cola.

P.S. fun fact, Google indexes many articles about this contract, including from reputable publications like Fortune. All with reference to Motor Vehicle Order Terms & Conditions. At the same time, the links lead to the version of the document without this update, the version of the document US v.20230201, and the version with the paragraph – US v.20220720. If Tesla numbers documents the way we do at Axon (which is strange, you know that in the States the dates are written differently), then it turns out that the media uses a version that is six months older than the current one. Or someone inserted 2022 to replace it with 2023. It's not much, but interesting.