What to look out for when purchasing
As the demand for second-hand vehicles continues to boom, it has recently been reported by numerous news outlets that an investigation has revealed that thousands of cars damaged or written off in serious crashes are being illegally repaired and sold as second-hand vehicles to unsuspecting customers who have no idea that they may be driving around in a ‘death trap’.
In one instance, an individual was sold a second-hand vehicle which had previously been written off with damage to the sill, deployed air bags and a front wheel which had been completely ripped off. Other cases have included people being sold cars without airbags or with broken crossbars.
Knowingly selling a vehicle in this way without declaring that it has previously been written off is illegal and, if you have been sold a second-hand car in the same or similar circumstances, you may have a claim for breach of contract or misrepresentation against the seller.
The Law on Misrepresentation
What is misrepresentation?
Misrepresentation occurs when one party (Party A) makes an untrue statement of fact or law to another party (Party B) which subsequently induces Party B to enter into a contract with Party A causing Party B to suffer loss.
There are three types of misrepresentation:
- Fraudulent: where a false statement has been made knowingly, or without belief in its truth, or recklessly as to its truth.
- Negligent: a representation has been made carelessly and in breach of duty or without reasonable grounds for believing the truth of the statement.
- Innocent: a representation that is neither fraudulent nor negligent.
Inducement
Once it has been proven that a false statement of fact has been made, the next step is to show that this false statement did in fact induce the party to whom the statement was made (Party B), to enter into the contract. A false statement alone is not enough.
There are three requirements of inducement:
- The representation made must be material, not simply an inconsequential statement which is of no relevance to Party B;
- The representation must be known to be a misrepresentation by the representee and;
- The representation must be relied and acted upon by Party B.
What are the remedies for misrepresentation?
The remedies for misrepresentation are rescission and/or damages.
Recission
The primary remedy for misrepresentation is recission. The remedy of recission works by placing the parties in the position they would have been in had the contract not been made. The effect of the remedy therefore is to reverse the contract and place the parties back into the position they were in before the contract was made.
It is however important to note that there is a series of ‘bars to recission’ where a party would be prevented from rescinding the contract due to the existence of a specified factor or circumstance.
Damages
Although rescission is an effective remedy and releases the parties from their obligations under the contract, there are sometimes circumstances in which the damage caused goes beyond the contract in question. In these circumstances, damages may be an effective remedy.
Damages for negligent and fraudulent misrepresentation are calculated in accordance with the usual law of damages.
Breach of Contract
Where a statement has been made during the course of contract negotiations, there can be some confusion as to whether that statement was intended to be a representation or a term of the contract.
If the statement is found to be a term of the contract as opposed to a representation, then the false statement will lead to a breach of contract, rather than a claim for misrepresentation.
If this is the case then you may be entitled to damages as a remedy for breach of contract.
What else can you go to protect yourself when buying?
When buying a second-hand vehicle, it is usually a good idea to make the purchase using your credit card. This is because, if you’ve bought a second-hand car from a dealer using your credit card and something goes wrong, you’re afforded additional protection for your purchase under section 75 of the Consumer Credit Act 1974.
By virtue of section 75 of the Consumer Credit Act 1974, when you purchase through your credit card, the credit card company has equal responsibility with the seller if there’s a problem.
Consequently, if the car you’ve bought is above £100 but below £30,000 then you should be covered, however, you will only be protected if:
- The car is faulty or not of satisfactory quality
- The car has not been delivered, or
- The seller has misrepresented the car.
How do I claim money back on my credit card?
Your first step should always be to contact the dealer you bought from.
If they don’t reply or refuse to give you a refund, then contact your credit card company and follow their set steps.
How can we help?
Martyn Prowel Solicitors has a very experienced team of solicitors with extensive expertise in a broad range of vehicle disputes. If you have a concern about goods or services which you have purchased recently, contact our team today by calling us on 029 2047 0909 or by emailing us at [email protected] or by making an online enquiry.