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MILS Legal Update: Vehicle faultsBack

MILSLogo2“I have recently sold a vehicle. It was fine at the time but the customer now wants to reject it because their clutch has failed can they?

As you should all know by now there has been a change to consumer protection laws. This is the first in a series of articles and sample problem questions designed to assist motor traders in assessing consumer rights and the remedies available to them.

The first thing we need to consider is whether the vehicle was sold after 01 October 2015. Since then any business to consumer contracts have been governed by the Consumer Rights Act 2015 (CRA). This applies to all goods sold by motor traders.

  1. Was the vehicle of satisfactory quality when sold?

This is a contractual term implied by section 9 of the CRA. What is satisfactory quality is a question of fact for a judge to decide. Goods are of satisfactory quality where

“The quality of goods is satisfactory if they meet the standard that a reasonable person would consider satisfactory, taking account of—

(a)any description of the goods,

(b)the price or other consideration for the goods (if relevant), and

(c)all the other relevant circumstances….”

This will include being free from minor defects, being of a durability that can be expected by a reasonable person and fit for all the purposes for which goods of that kind are usually supplied; The court will therefore not expect the same quality from a brand new vehicle as it would from a second hand vehicle. Neither will it expect the same quality from a £10,000 vehicle as it would from a £1,000 vehicle.

  1. Did you accurately describe the vehicle?

This is a contractual term implied by section 11 of the CRA. It is very important that vehicles are accurately described. We all want to obtain the best value for goods sold. However, over selling can itself cause complications as if goods do not match the description a consumer will be able to take action for breach of contract and recover compensation or potentially recover all of the money paid for the vehicle.

This also works in a motor trader’s favour. Where there are issues with a vehicle it is always best to be up front about it as there is no breach of contract where the fault complained of was:-

  • specifically drawn to the buyer’s attention, or
  • where the buyer examination before the purchase ought to have revealed the fault.

If you can prove any issue was drawn to the customer’s attention at the time of sale, and they continued to purchase the vehicle anyway, they cannot complain later; unless the issues are more serious then expected.

  1. How long must a vehicle be of satisfactory quality?

A vehicle must be of satisfactory quality when sold.

That doesn’t mean that if there was no apparent fault when it was sold that there is no case. Satisfactory quality includes the requirement that the vehicle is fit for all the purposes for which goods of that kind are usually supplied, and of a durability that can be expected by a reasonable person. You will therefore be liable for any faults that develop soon after sale where a reasonable person would not have expected those fault to have developed.

The main changes for the sale of goods that were brought in by the CRA relate to the remedies open to consumers. For contracts with consumers entered into after 01 October 2015 it will be helpful to consider 3 periods

0-30 days–   During this period the consumer can cancel the contract where they can prove that a fault was present at the time of sale. It they cannot prove the good were faulty they cannot cancel the contract but they can require a repair (see assumption below).

0-6 months- During this period it will be assumed that any fault was present at the time of sale. However the consumer is required to allow you at least one opportunity to repair or replace the vehicle unless you can prove it was not faulty at time of sale.

½ -6 years- If a vehicle is in breach of contract a consumer can take the matter to court for 6 years from the date of the purchase. After the first 6 months it will be for the consumer to prove that the goods were faulty at the time of sale. The further from the sale in time and/or distance the more difficult this will be

Conclusion

Any issue that develops with a vehicle is capable of being a breach if it is proven to be a fault. Garages should think long and hard when considering their actions. However, where the issue is commensurate with the age, mileage and description of the vehicle it is arguably not a fault and then a court would be free to decide that this would not breach the contract. As each court must decide this for itself there are widely varying decisions on what faults can reasonably be expected during vehicles life. We will continue to monitor cases and update members as to how the courts interpret the new act

As always this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

 

Paul Carroll, Solicitor, Motor Industry Legal Services

 

Posted by Sue Robinson on 08/04/2016