Human Resource Selection 9th Edition by Marianne Jennings

Exercise 30

On February 21, 1990, Robert Barto and his wife signed an agreement with Estate Motors, Ltd., of Birmingham, Michigan, to purchase a Mercedes Benz 500 SL automobile. Doug MacFarlane, their salesperson, told the Bartos that because of high demand, their car might not be delivered for 18 months.
In mid-August 1991, Mr. MacFarlane telephoned Mr. Barto and informed him that his Mercedes would be at the dealership and ready for pickup on August 30. Mr. MacFarlane also informed Mr. Barto in that telephone conversation for the first time that he would have to pay a luxury tax on his new car (in addition to the purchase price, state sales tax, and license / title fees)when he came to pick it up.
Mr. Barto was angry about having to pay the luxury tax because he believed that his car fell within the scope of the preexisting binding contract exception, as his order for the car had been placed before September 30, 1990. During the ensuing weeks before his car arrived at Estate Motors, Mr. Barto telephoned the Mercedes-Benz district sales representatives and legal counsel and was informed that Mercedes-Benz was advising their dealers that the new luxury tax was not to be assessed on cars ordered before September 30, 1990. Mr. Barto also learned that of the 114 Mercedes-Benz dealers within the Midwest region, only Estate Motors was assessing the tax on cars ordered before September 30, 1990.
Mr. Barto attempted to negotiate a manner of payment of the tax with Estate Motors. He first proposed that he bring with him two checks when he picked up his car-one check payable to Estate Motors for everything but the amount of the luxury tax, and one check for the luxury tax payable to the IRS. The dealer refused this arrangement. Mr. Barto then suggested that he pay the luxury tax into an escrow account. Again the dealer refused. Because Mr. Barto wanted his new car, he ultimately agreed to pay Estate Motors the full purchase price, including the luxury tax assessment.
On August 30, 1991, when Mr. Barto went to Estate Motors to pick up his Mercedes-Benz, he tendered to the dealer his check for $111,446 to cover the $99,950 purchase price of the car, the sales tax / license / title fees of $4,501, and the 10 percent luxury tax amounting to $6,995. Mr. Barto and the dealer also executed on August 30 Estate Motors' "Statement of Vehicle Sale," which reflected the breakdown of his $111,946 total purchase price, license / title transfer and proof of insurance information, and the odometer disclosure.
Mr. Barto continued to protest having to pay the $6,995 luxury tax on his new Mercedes after picking up the car. The dealer provided Mr. Barto with a blank IRS 843 form for a tax refund. When the IRS denied Mr. Barto's claim a refund, he filed suit against Estate.
Mr. Barto wished to rescind the agreement. He wanted his money back. Is Mr. Barto entitled to it? Is there a contract at all? [ Barto v United States , 823 F. Supp. 1369 (E.D. Mich. 1993)]