Millions of new and used cars are sold every year in this country. It is well-known within the industry that many of the used cars are damaged, ranging form minor body damage to serious frame damage.
Many dealers sell these cars and make a handsome profit. The first issue is: what is the dealer’s liability if they sell these cars?
There are many areas of law that address this liability: Consumer Fraud, Fraud, Breach of Warranty, Lemon Law (New and Used)
The basic premise of fraud is that if the dealer knows about the damage and they think that disclosing the information would make a difference in the consumer’s purchasing decision they must make the disclosure, whether or not they are asked by the purchaser. There is also liability for reckless disregard, meaning if they intentionally disregard the risk and stick their heads in the sand to avoid learning that the car was damaged, there is liability.
The analysis is more complex but, for the sake of brevity, if the dealer knew or should have known and failed to disclose this information there is liability under the Consumer Fraud Act. Intent must be proven under this situation.
The dealer can also be sued if the they misrepresented that the car was not in an accident when it actually was, even if they did not know. This is called an affirmative misrepresentation of fact. The dealer as a seller of merchandise is obligated to assure that their representations pertaining to their goods must be accurate.
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