From the IRS:
What is a written binding contract?
In general, a written binding contract :
- is enforceable under state law, based on the state and relevant facts and circumstances, and
- does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.
An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.
Please see this Article from the IRS about New Electric Vehicles.
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