Legal Question in Business Law in California

Does a used car dealer have a duty to disclose whether a used vehicle they're selling has ever been in an accident?

In other words, say a used car dealer sells a used car that has been in an accident, but fails to disclose that to a buyer. If the buyer later discovers that the used vehicle he purchased has an accident history that the dealer never disclosed, does the buyer have any claim against the used car dealer for any damages (i.e. depreciation, rescission of contract, etc)? In other words, is there any liability for a used car dealer for failing to disclose whether a used vehicle they are selling has ever been in an accident? Simply put, does a used car dealer have a duty to disclose whether a used vehicle he is selling has ever been in an accident? If so, what is the authority/law?

Asked on 6/04/10, 1:16 pm

2 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

No, but they must disclose if they know it is salvage title. You should be using CARFAX to check the vehicle history as part of your due diligence. Otherwise, you're just an uneducated naive buyer at the mercy of the 'buyer beware' market.

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Answered on 6/04/10, 4:26 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I agree, and I'd add that sellers may have a duty to disclose facts of which they have knowledge IF those facts would be likely to affect the buyer's willingness to buy at the price asked. However, sellers, including dealers, don't have a duty to disclose facts they are unaware of and have no reason to be aware. There is one exception; brokers and agents selling residential real estate do have some affirmative duty to investigate certain matters and disclose them.

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Answered on 6/04/10, 5:01 pm


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