The court ruled the buyer had opportunities to inspect the car before buying it and to call the seller to ask about the car, and chose to do neither

Suppose you have a not-so-nice collector car you want to sell for big bucks. Your best shot might be to list it on eBay or some other Internet web site. Here are some tongue-in-cheek tips about how to maximize your chances of cashing out at the top of your market:

1. Post lots of pictures-it gives people the comforting sense that you are being candid about the condition of the car and that everything is on the up and up. Don't worry that the photos might show the car's warts, because pictures lie. The low resolution of those little thumbnails will make everything look perfect. And if it doesn't, fix it with Photoshop.

2. Write a very long description about your car-it gives great comfort to the buyer that you know the car and are being truthful about it. But be as general as possible. Avoid any meaningful specifics about the condition of the car, because that is too risky. If you find that hard to do, try emulating an auction catalog, where they generally spend more time writing about the model than the specific car being sold.

3. Describe two or three of the car's little warts. They won't kill the deal, but you will give the buyer the impression you are making full disclosure.

4. Invite people to come inspect the car themselves, as it inspires confidence that you have nothing to hide. But don't worry about it, because they won't come. If someone actually does and sees how bad the car really is, apologize and move on. There are a lot of other potential victims out there

5. Above all, make sure to state the car is being sold AS IS, and that all your statements are made only to the best of your knowledge, to help avoid nasty little comebacks when the buyer sees the real thing as it rolls off the car hauler.

The listing described the car as gorgeous

A recent New York Supreme Court Appellate Division case illustrates the wisdom of this advice and that we still have a lot of caveat emptor in our legal system. Our defendant was a seemingly nice little lady who owned a well-used 1995 Mercedes-Benz that she didn't want any longer. Her son told her he could take care of it, and listed it on eBay. The listing described the car as "gorgeous," and the numerous pictures bore that out.

The listing disclosed three blemishes-a missing master key, a missing CD cartridge, and a missing spare tire. The listing stated that the seller was the original owner, and invited bidders to come inspect the car and to call with any questions about the car's history. It ended with a disclaimer that the car was being sold AS IS, and that conditions were being disclosed to the best of the seller's knowledge.

Our "successful" bidder immediately started having problems with the car. He had it professionally inspected and learned that:

  • It had substantial accident damage that had been repaired

  • The entire car had been repainted

  • There were rusted suspension parts, attributable to worn undercoating

  • There were electrical and sensory system issues

  • It had a defective throttle

  • It had a catalytic converter needing replacement

The estimated cost to repair all of these problems was a whopping $14,268. The buyer sued, claiming he should get back the purchase price on the legal theories of breach of warranty and fraud. He did not fare well with the trial court. To make a bad situation even worse, he appealed the loss.

Seller's opinion doesn't constitute warranty

The Appellate Court explained that, under the Uniform Commercial Code, the seller's factual statements about the car and its condition create a warranty. If the statements are untrue, the buyer can either unwind the deal or collect damages for the shortcomings. However, the Court also described the major exception. Any seller statements that either express the seller's opinion or just commend the car will not be treated as creating any warranty. That is, a seller can state that he thinks something is so, or talk about how great his stuff is, without risking contractual liability.

The Court looked closely at the eBay listing in order to apply these two legal principles. The only explicit statement in the listing was that the Benz was "gorgeous." To the Court, that statement was clearly just the seller's opinion, and mere "puffery" about the worthiness of the car. With no statements made at all about the other problem areas, the Court was unable to find anything that could create a warranty about the condition of the car. No warranties can be created by the buyer's impressions, but only by the seller's actual statements.

Buyer had opportunity to inspect the car

The buyer also claimed the totality of the listing exaggerated the condition of the Benz and constituted fraud, but that proved to be an even tougher case to make. To be fraud, the Court pointed out, the seller must intentionally lie about the car, and the buyer must reasonably rely on the seller's lies.

The Court didn't bother addressing whether the seller lied or not, and simply ruled that it was unreasonable for the buyer to rely on the seller's statements about the car. The buyer had the opportunities to inspect the car before buying it and to call the seller to ask about the car, and chose to do neither.

The Court dismissed the buyer's argument that the 2,700-mile distance between him and the car made the inspection impractical, pointing out that he could easily have hired a local mechanic to make the same inspection before the purchase as he made after. And, to rub salt into the wound, the Court essentially said, "After all, this is a used car deal!"

It doesn't work in the used car world

"Legal Files" has been quite amazed to encounter so many situations where a buyer has purchased a car online without adequate investigation, inspected it after receipt, decided it wasn't as nice as he expected it to be, and then demanded to unwind the deal. That may work at Costco and Nordstrom, but it doesn't work in the used car world.

This case offers two very important lessons:

1. No matter how nice the car looks in the pictures or how it sounds in the text, and no matter how dark the red mist that has clouded your judgment, you just can't read more into the seller's statements than is literally there.

2. No matter how far away the car is located, no matter how reliable the seller appears to be, and no matter how short the available time might be, you can't just accept everything the seller says and do nothing to check out the car yourself, then complain later. We all heard when we were kids, "God helps those who helps themselves." The law is the same way.

Five ways to protect yourself as a buyer

If you are buying a car long distance, and you care about the condition of the car, here are five things you should do to protect yourself, in ascending order of cost and effort:

1. Contact the seller directly and ask lots of questions. If by telephone, take copious notes to help establish what was said.

2. Get and carefully review adequate documentation of the complete history of the car.

3. Get a CARFAX (or equivalent) report.

4. Have the car professionally inspected. To cover all the bases, this may require a mechanic for the mechanicals, a body repair/restoration shop for the paint and body, and a marque specialist for authenticity. They should all be well experienced with the model you are considering, and they should be selected and hired by you to assure loyalty.

5. Even after doing all of the preceding, go see the car anyway. You are writing the check, you are going to have to live with the car, and only you can know if the car meets your standards. There is simply no substitute for your own eyes.

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