Consumer Sales and Guarantees Directive, Article 3, 3.

1. On the question whether a seller of second-hand cars fraudulently obtained the buyers contract declaration if he warranted the sold car as being accident-free while “talking at large”.
2. Subsequent performance by means of delivery of other defect-free goods (replacement) is not prima facie excluded on the grounds of impossibility, if the contract in question was a sale of specific goods. Replacement is possible, if the defective goods can be substituted with those of the same type and value based on the common conception of the parties. The replacement of a second-hand car is usually impossible, if the purchase decision of the buyer has been preceded by a personal inspection of the car.

On 14 March 2002 the plaintiff bought a second-hand car from the defendant, a car manufacturer for the purchase price of EUR 29.000. The car had been offered on the internet by the manufacturer’s office in L. The contract was concluded in the manufacturer’s office in L. after the plaintiff had personally inspected the car. The contract form contained the passage: “Number, type and extent of accidental damage according to prior owner: NONE”. The office in L. had purchased the car from a subsidiary of the defendant, the D. GmbH, which had previously had the car examined by an expert. The car was delivered to the plaintiff on 21 March 2002. On the occasion of a visit to a garage, the plaintiff discovered that the car had suffered a considerable accidental damage which had not been professionally repaired pro. He notified the defendant of the defect. A subsequent expert report initiated by the defendant on 29 January 2003 confirmed the buyer’s suspicion. It turned out that the contested repair had been effectuated in the defendant’s office in M. in September 1998. By letter dating from 24 April 2004 the plaintiff declared the avoidance of the contract due to deceit. The plaintiff initiated civil proceedings and demanded the payment of EUR 29.000 together with interest to the D. GmbH, which had financed the purchase price for the car. The appellate court has fully upheld the plaintiff’s claim.

The Federal Court of Justice has upheld the plaintiff’s appeal on a point of law and referred the case back to the appellate court.
The plaintiff had paid the purchase price without legal grounds for doing so (§ 812(1)(1), 1st case BGB). The contract of sale dating from 14 March 2002 was void under § 142(1) BGB. The avoidance of the contract the plaintiff had declared by letter dating from 24 April 2003 was valid, since the sales assistant B. had fraudulently deceived the plaintiff by stating that the car was accident-free (§ 123(1) BGB). This deceit was to be attributed to the defendant (§ 166(1) BGB). The statement of the sales assistant B. about the car being accident-free had been objectively untrue. The plaintiff had not been bound to interpret the clause in the order form stating “Number, type and extent of accidental damage according to prior owner: NONE” as a (partial) revocation of the previous statement claiming the car to be accident free, since standard clauses of this type did not mean that further statements in the run-up to the conclusion of the contract were invalid. The behaviour of the sales assistant B. had been deceitful. According to the established judicature of the senate, a seller acts fraudulently, if he – upon the question of the potential buyer - makes false statements while talking “at large” without any factual basis and if the statements concern a point which had recognisably been of decisive importance to the buyer. According to the facts established by the appellate court, the sales agent B. had warranted the car being free from accidents “without sufficient factual basis” and had thus “talked at large”. Thus, the question whether the knowledge about the accident which had happened more than three years ago acquired by the employees working the defendant’s office in M. could be attributed to the defendant or the sales assistant B., was of no relevance here.
According to established case law the seller of a second-hand car was indeed under no obligation to inspect an offered car for accidental damages, if the circumstances did not indicate that the car had been involved in an accident. However, if he did not inspect the vehicle himself and nonetheless warranted it being free from prior accidents, he had to point out his limited knowledge, since he otherwise would create the impression that his statement was made on the basis of reliable knowledge about the status of the car. The sales assistant B. had omitted to give an according notice. He had warranted the car being free from accidents without pointing out that he did in fact not have any information about the status of the car and the existing files did not contain the according information.

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