Who is responsible if a car breaks down during the first hundred kilometers?

A fresh court decision from Harju County Court. The buyer’s gaze stopped on the four-year-old Volkswagen Passat, which had traveled 150,000 km. A price was agreed with the seller, which, taking into account market conditions, was on a so-called higher side.

The buyer consciously made a slightly more expensive choice, assuming better quality in return. But the result was completely different.

The first trip of the happy buyer was the road home with a length of about 100 km. Upon arrival, the buyer heard unnatural sounds in the operation of the engine. Leaving the car idling, the warning lights in the machine’s armature soon came on.

The next trip had to be made to the car dealership, where several minor faults and deficiencies were identified. During a second and more thorough inspection the car’s engine was dismantled, and it was discovered that there was no escape from costly repairs, which would have cost almost a quarter of the car’s selling price.

The buyer informed the seller of what had happened and asked for the repair to be financed. The seller refused, claiming that the car was in perfect condition at the time of delivery. The car was regularly serviced at a dealership, in addition, a technical inspection had been passed on the day of delivery to the buyer.

Is the seller an individual or a company?

As the seller was a legal person, the buyer first sought redress from the Consumer Disputes Commission, seeking damages or a refund of the sale price. The Commission recognized the consumer’s right to withdraw from the contract and to be reimbursed in addition to the costs incurred.

The seller did not comply with the Commission’s decision within the prescribed time limit, after which the buyer brought an action in court. The seller came up with additional objections in court, emphasizing, among other things, that it was not a sale to the consumer at all, because the sales contract was concluded with the bank as a lessor and not with the buyer.

This was not an expert objection, as the participation of the financier (lessor) in such an agreement does not distort the actual buyer-seller relationship. The court found that the sale to a consumer had taken place.

In the case of consumer sales, there is generally a presumption that the defect (non-compliance with the terms of the contract) which occurred within six months was present at the time of delivery. Consequently, the seller had to be able to prove in court that he was selling a good car and that the fault was caused by the buyer himself.

The seller could not overcome such a burden of proof and the buyer achieved a complete victory in court. The seller must refund both the sale price and reimburse all other costs incurred by the buyer in connection with the unsuitable vehicle, including legal costs.

Is the private seller also liable?

The result would probably have been similar if the consumer issue had been left aside, i.e. in a situation where the buyer and the seller would have been in the same legal position (e.g. two natural persons). It is unlikely that the seller knew nothing about the engine failure in this case.

The possibility that there was no failure and that it happened by accident by the new owner during the first 100 km belongs to the field of fairy tales. It can, therefore, be concluded that the seller deftly concealed the defect and knowingly sold the faulty car. In this case, the responsibility still falls on the seller.

In light of the above, a piece of wisdom would be such that when you sell a used thing, provide the buyer with all the important information you know about it. This will most likely release you from liability. On the other hand, hiding known errors can be very costly in retrospect.

Urmas Kiik, a sworn advocate of Hedman Partners law firm, represented the buyer in this litigation.

« Back to articles
Hedman

Our memberships:
FinanceEstonia,
Teenusmajanduse Koda,
EstVCA, EstBan, FECC,
IBA & IBA European regional Forum