Used Vehicles And The Sale Of Goods Act

I recently had the opportunity to defend a car dealership in an action where the plaintiff was claiming that they had effectively sold him a lemon because components of the heating and air conditioning system (“HVAC”) were not working properly. The plaintiff’s claim was that his vehicle was not fit for the purpose for which it was intended under the Sale of Goods Act (the “Act”).

Section 18 under the Act implies into a contract for the sale of goods (in this case a vehicle) a warranty that what you are purchasing is fit for the purpose for which you intend to use it. For example, if you purchased a cell phone and the dial-out function didn’t work, you could likely take it back and argue that it is not fit for the purpose for which you bought it, namely, calling people.

In this case, the plaintiff argued that his vehicle (an SUV) was not fit for his intended use because the HVAC would blow hot and cold air inconsistently which caused him aggravation and embarrassment. Furthermore, he argued it was unsafe because it was such a distraction to have to constantly adjust the air temperature.

Prior to the vehicle being purchased, the dealership had it inspected and everything checked out, even the HVAC. The plaintiff subsequently brought the vehicle into the dealership on 11 different occasions over the course of 3.5 years with various complaints about the HVAC. The plaintiff first brought the vehicle in four months after he purchased it. On each visit, the dealership conducted extensive diagnostic testing and on occasion identified an issue with the HVAC and fixed it all at no charge to the plaintiff.

Our courts have consistently said that a dealer of used vehicles cannot guarantee it after it has left the lot. This means that the courts will generally refuse to find a breach of an implied warranty under the Act unless there is a failure of a component of the vehicle that renders it unsafe to drive. The implied warranty for a used vehicle is fundamentally different than one for a new vehicle.

Prior cases I found where the implied warranty was found to be breached were cases where the engine failed very shortly after the used car was purchased.

In our case, the vehicle left the lot in excellent condition, albeit used, and the plaintiff didn’t report any problems until four months later. Our argument was that there was no breach of an implied warranty because:

1. the vehicle was found to be in good working order; and,
2. his allegations of perhaps being aggravated and uncomfortable while driving do not compromise the fitness of that vehicle to drive safely on the road.

I was effectively arguing that the HVAC problems were not serious enough to render the vehicle unsafe to drive.

As we have not yet received a decision from the Judge, stay tuned for my blog next month where I will comment on the Judge’s decision.