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  1. #1
    Join Date
    Sep 2006
    Posts
    9

    Default Seller's Liability For a Car Sold in 'As Is' Condition

    We received a letter from an attorney stating that a vehicle we sold privately in June of 2007 had been cosmetically repaired to hide a defect and now they want $6000.00 plus legal fees for out of pocket costs for repairs incurred, because apparently there was a leak from this cosmetic repair that caused the engine to blow up???? (We purchase the car used at 50,000 miles, sold at 120,000) The letter asks we make contact within 10 days… The letter also states that the buyer is well within his rights to sue for fraudulent misrepresentation under the contract? We made no contract… I made a simple bill of sale with buyers names, vehicle information, purchase price and a vehicle sold "as is" statement.

    We're not exactly sure what to do, we've never been sued or threatened with a law suit. This occurred in the state of Washington.

    Appreciate any advice.

    Below is what occurred:

    Mr. John Doe called on the morning of June 16, 2007, after seeing our 2000 Jeep Cherokee for sale in an Auto Trader advertisement. He asked to meet him at the McDonald’s to view the vehicle.

    Mr. Doe inspected the outside of the Jeep and the engine compartment thoroughly and then inspected the interior thoroughly. I told Mr. Doe that I was aware that the A/C worked, but for some reason exhausted very little air out the interior vents. I also told him I was quoted a price of between $700-800 for the interior vents repairs, following this statement, I told Mr. Doe that this vehicle is being sold in “AS IS” condition. He said O.K. Mr. Doe stated he knew someone who did Jeep repairs.

    Mr. Doe then asked to drive the Jeep, I gave him the keys, he started the vehicle and said he was told what to look for by a mechanic friend , at this point Mr. Doe stated his mechanic friend said to check the transmission by depressing the brake, putting the transmission into drive and accelerating the engine. Mr. Doe did this in drive and in reverse. I asked if there was a problem and he said, “No, I didn’t hear anything”. Mr. Doe then backed the Jeep out of the parking spot and drove around the shopping mall parking lot. At one point Mr. Doe did several, aggressive, figure eight circles. I asked what he was doing and he said he said he was checking for power train issues, 4 wheel drive, etc.

    Mr. Doe then drove the vehicle to a McDonald’s parking spot and parked the vehicle, but left the Jeep running. Mr. Doe & I discussed purchase price and we agreed on a price of $8,000. Immediately, I restated the comment of the Jeep being sold in “AS IS” condition. I restated the “AS IS” comment, because I didn’t want him to think I was going to pay for the interior vent repairs. Mr. Doe agreed and said he would need to call his bank to get the money. After several minutes on the phone with his bank, he said that they could not get the money today and it would be Monday before they could cut a check. Mr. Doe asked if I would take a $500.00 check and he would take the vehicle and pay me the balance on Monday. I told Mr. Doe I would take a check to hold the vehicle until Monday, but would need payment in full to release the Jeep to him. Mr. Doe decided to give me a check for $500.00, but that it would be a check from his mother, because he was going through some financial problems. Mr.Doe’s mother, that’s what he told me, drove Mr. Doe to the McDonald’s to view the Jeep.

    As I arrived home, Mr. Doe called and said he really wanted to purchase our vehicle that day. We had plans in the afternoon and our bank was only open until the afternoon as it was a Saturday.

    Mr. Doe said he was going to try and work something out with his bank to purchase the vehicle on that day. We said we will try to work with him, but our bank closes at 5:00 p.m. and his bank would want the title. He said O.K. Mr. Doe called us again asking if we could drive to Somewhere so he could get the money from his bank. There wouldn’t have been enough time to get back to our bank for a payoff. So we said we would hold it
    until Monday. Mr. Doe called back a third time stating Ms.Doe’s bank would arrange with our bank to do the transaction at our bank in Somewhere that afternoon.

    We met Mr. Doe and Ms. Doe at our bank in Somewhere, USA. Ms.Doe had a cashiers check for $8000.00, from her bank account, made out to our bank. Because Ms. Doe was purchasing the vehicle, I had her sign the “Bill of Sale” which stated clearly, “Vehicle sold as is”. Once all the paper work for the bank was completed and the bank handed over the title, Mr. Doe said he would need to put his name on the vehicle registration card for transfer of ownership and we would need to submit to the DMV, which we did.

    The transaction was completed June 16, 2007, 5:00 P.M., and we then parted and heard nothing from Mr. Doe until October 19, 2007, when we received a letter from a lawyer.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,636

    Default Re: Seller's Liability For a Car Sold in 'As Is' Condition

    Even within the context of a sale of goods by a merchant, Washington recognizes the significance of the language, "as is":
    Quote Quoting RCW 62A.2-316, Exclusion or modification of warranties
    (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (RCW 62A.2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.

    (2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof."

    (3) Notwithstanding subsection (2)
    (a) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty; and

    (b) when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him;

    (c) an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade; and

    (d) in sales of livestock, including but not limited to, horses, mules, cattle, sheep, swine, goats, poultry, and rabbits, there are no implied warranties as defined in this article that the livestock are free from sickness or disease: PROVIDED, That the seller has complied with all state and federal laws and regulations that apply to animal health and disease, and the seller is not guilty of fraud, deceit or misrepresentation.
    (4) Notwithstanding the provisions of subsections (2) and (3) of this section and the provisions of RCW 62A.2-719, as now or hereafter amended, in any case where goods are purchased primarily for personal, family or household use and not for commercial or business use, disclaimers of the warranty of merchantability or fitness for particular purpose shall not be effective to limit the liability of merchant sellers except insofar as the disclaimer sets forth with particularity the qualities and characteristics which are not being warranted. Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (RCW 62A.2-718 and RCW 62A.2-719).
    To prove a fraudulent misrepresentation, the plaintiff would have to establish that you were aware of the defect, made misrepresentations concerning its nature with the intent that the buyer rely upon them, and that the buyer in fact relied upon them. That's an effort to circumvent the "as is" language. I can't promise you that they won't sue if you ignore them, or even if you don't, but I don't think that their case is very strong. (Not that I suspect you of doing this, but if they can show that you purchased the vehicle for significantly less than $8,000, then turned around and sold it for $8,000, their case gets stronger.)

    If I received such a threat, I personally would reply back with a very short letter to the effect of, "Dear Mr. Lawyer, I have received your letter dated 10/19. As you probably already know, I was not the first owner of the 2000 Jeep Cherokee purchased by your client. If a repair such as the one you describe was made by a prior owner, I know nothing about it or about any associated latent defect. Your clients had the opportunity to fully inspect the vehicle prior to purchase, and in fact thoroughly inspected and test-drove the vehicle prior to purchasing it 'as is'. While it is unfortunate that the vehicle developed mechanical problems after the sale, that is a risk your clients knowingly and voluntarily assumed." (Note, I can't draft a letter for you, and if you want approval of specific language I would have to suggest consulting a lawyer licensed in your state. You can also hire a lawyer to send such a letter.)

    While my instinct is to say nothing, this is a civil case and (unlike a criminal case) there is potential for silence to be used against you - that is, if somebody makes an accusation against you that would inspire an 'ordinary person' to protest, silence can be asserted as evidence of guilt. A short, truthful response asserting innocence eliminates that possibility. It also lets the lawyer know that bluster doesn't scare you.

  3. #3
    Join Date
    Sep 2006
    Posts
    9

    Default Re: Seller's Liability For a Car Sold in 'As Is' Condition

    Our purchase price was $13,000 +. We had owned the vehicle for approx. two years prior to the sale. I stated in my post the mileage at 50,000 miles at our purchase, but the mileage was actually 83,000 and the mileage at sale was 118,000.

    I will have an attorney write a letter next week. If they pursue this further, what would likely be their course of action, and what should be mine?

    Thank you for your reply! The expert law forumn has been very helpful.

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,636

    Default Re: Seller's Liability For a Car Sold in 'As Is' Condition

    I expect that they will either sue you, or decide that you called their bluff and walk away. Unfortunately, I can't tell you which.

  5. #5
    Join Date
    Sep 2006
    Posts
    9

    Default Re: Seller's Liability For a Car Sold in 'As Is' Condition

    I retained a lawyer to respond to the demand letter for compensation. This was not cheap… for 20 minutes in his office and 6 lines of verbiage, plus research time, mailing, etc. $300.00. Hope this is the end of this…

    Side note: I did find it odd that on this letter, below the lawyer’s signature and printed name was his email address???? Is this common practice?

    Thanks

  6. #6
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,636

    Default Re: Seller's Liability For a Car Sold in 'As Is' Condition

    It's not particularly common - in my experience, assuming they even share it, most lawyers stick their email in the letterhead. But I don't see it as a problem. email communication can sometimes be a cost and time saver.

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