Fraudulent Representations involving Purchasing a Car - What should I do?
You go to the used car lot and fall in love with a specific car. You decide you absolutely have to have that car, but you only want it if it has never been in an accident. The salesman clearly tells you that the car is in perfect condition and has never been wrecked, so you happily sign the contract to purchase the car and drive it off the lot that day. Soon after purchasing the car, you take it to the mechanic for body and engine trouble, and you find out that the car had indeed been in an accident and that the salesman lied. What do you do?
This exact fact scenario occurred in the seminal case of City Dodge, Inc. v. Gardner, where the court stated the principle that the injured party gets to choose his remedy. The Georgia Court of Appeals stated in that case: “Where the purchaser of personal property has been injured by the false and fraudulent representations of the seller as to the subject matter thereof, he ordinarily has an election whether to rescind the contract, return the article, and sue in tort for fraud and deceit, or whether to affirm the contract, retain the article, and seek damages resulting from the fraudulent misrepresentation.”
The court in City Dodge, Inc. held that rescission was accomplished in the following scenario: When the buyer discovered the misrepresentation, “he notified defendant dealer that he was rescinding the purchase by reason of fraud simultaneously making an unconditional return of the automobile. When the dealer refused to accept such delivery the buyer made it a continuing tender by informing defendant he would place the car at his residence where it would remain and would not be used and where dealer was authorized to take possession thereof at any time.”
In the event you choose to cancel the contract, return the article and sue in tort for fraud or deceit, it is advisable to also write a letter to be delivered with the item. This letter should explain why you are returning the item, and that you are electing to rescind the contract based on the misrepresentation that was made to you. It is imperative that you cancel the contract and return the item immediately upon discovering the misrepresentation if you elect to pursue this course of action. If the item cannot easily be returned, it is enough to identify where the item will be located and state that the seller can retrieve it at his convenience. When suit is filed on this issue, the purchaser can seek complete repayment of the purchase price and related expenses.
However, if the buyer had wanted to keep the car and instead seek damages, the case of Rustin Oldsmobile, Inc. v. Kendrick provides guidance on the proper amount of damages. In that case, a person in a similar situation affirmed the contract for purchase of a car and sued for damages. The Georgia Court of Appeals in Rustin Oldsmobile, Inc. determined that the amount of damages in such a situation is the difference between what the car would have been worth if it was as represented and the actual value of the car at the time it was purchased.
