Q: What circumstances would justify canceling this auto contract?
A: California Law provides a myriad of reasons to justify rescinding a contract to purchase or lease
a new or used automobile. Basically, California allows an automobile purchase or lease agreement to be rescinded if it is
based upon fraud, mistake, or significant non-disclosure or concealment. The basic concept is that there must be a "meeting
of the minds" in order for a contract to be valid.
A contract that is put in writing tends to eliminate significant "he said-she said" arguments over
what exactly was agreed to, since the significant terms of the contract are usually contained in the writing. California
law requires that the contract have no blank spaces when signed, and that the consumer receive a copy of any contract after
signing.
However, California provides consumers with vast protections against misrepresentations that are made
during the negotiations for the purchase or lease of goods or services. Further, there is no requirement that the salesperson
intended to make a misrepresentation; the fact that a representation was made during the negotiations which in fact is not
true is all that is required.
Some examples of misrepresentations, which would justify rescinding the sale, may include the following,
especially if more than one of them is present:
The inaccurate representation that the vehicle (or other consumer product) is new, when in fact it
is used or reconditioned (if your "new" vehicle had several hundred miles on the odometer, it was not likely a "new" vehicle);
Any inaccurate representation concerning the quality or benefits of goods or services (this would usually
cover anything told to you by the finance or sales manager, including how mechanically sound the used car is, how much you'll
be protected by the service contract, that the finance rate is the best available, etc.);
Significant non-disclosures of information required to be disclosed (such as the fact that the vehicle
was a "demonstrator," was previously totaled due to body damage or flood, has a salvaged title, was a previous "lemon law
buy-back", was involved in an accident involving damage to the frame, and a whole host of other problems which should have
been disclosed but were not.
Often, used car dealers will attempt to persuade you that you bought it "As-Is", and therefore whatever
problem you are experiencing is your problem. However, this is not true with respect to most problems discovered soon after
the sale, since the buyer's decision to buy "As-Is" was usually based upon some representation made about the vehicle that
proves not to be true. The most basic of these misrepresentations concerning the mechanical condition of a used vehicle center
on the requirement that the DMV requires all dealers to have a basic safety check performed on the vehicle to verify that
the vehicle is safe to operate on the road, as it has such basic safety features as brakes, brake lights, turn signals, lights,
etc. Invariably, this "safety" check is described by the salesperson as the service department having gone over the entire
vehicle with a fine tooth comb, and found it to be in superior mechanical condition good for at least another 100,000 miles.
The most egregious examples of misrepresentation can be found at any used car dealership catering to
individuals with bad credit, who are often persuaded to buy pieces of junk for over-inflated sales prices and interest rates.
These poor individuals think no one else will sell them a car, so pay large down-payments on useless vehicles so they can
get to work and pay their bills, only to find out their car payment money is being spent making repairs to a vehicle that
should be retired, with the end result that the car gets repossessed, and, you guessed it, sold to the next poor individual
with poor credit.
The above are just a few examples of facts which would justify rescinding a sale, and you are encouraged
to call us for a consultation. Undoubtedly, if you feel you were significantly misled, you probably were!
