Legal Question in Consumer Law in California

Mutual Mistake Recission On A Used Automobile Contract

I purchased a used car from a major dealership in Chino, CA. on 3/3/17. The dealership provided, at the time, a clean CarFax history report with no prior accidents and I in turn signed a document confirming rcpt of the report. Now 5 months later I was exploring the possibility of trading it in only to discover that CarFax now reports an accident with front, rear and side damage that happened on 10/14/16 (2 1/2 months prior to my purchase). The new/updated report shows that the accident wasn't added until 7/26/17.

The dealership I was looking at trading it in with explained that my car is now worth approx $5,000 less (Audi A4 Quattro Prestige) than originally quoted. I reached out to the salesman and he's no longer taking my calls. The finance manager wont return any of my calls either so I'm assuming the dealership, once I reach someone with authority, will understandable claim no knowledge of the accident as they too used the CarFax report to determine its value at the time of the sale.

Can the contract be rescinded based on MUTUAL MISTAKE RESCISSION and if so what will I owe the dealership if anything now that the car has additional miles on it?


Asked on 8/18/17, 10:59 am

1 Answer from Attorneys
John W. Hanson The Hanson Law Firm

Good question, however, I think you should consider the possibility that the dealership knew the Audi was in an accident and had been damaged. Dealership buyers have a much keener eye than the ordinary consumer, and know what to look for. They also use, or can use, paint thickness meters that can tell when repainting has been done. If they knew the car had been in an accident that caused significant damage, yet still handed you clean Carfax, they might be guilty of fraud. Dealerships know that Carfax reports often miss significant issues, and do not simply rely on them as consumers do. Material misrepresentations in the sale may entitle you to force them to buy back the car and give you your payments back.

I would definitely have the car inspected for frame damage, which could mean it is unsafe, and to better understand the extent and nature of damage and repairs. You should also contact a consumer lawyer, who may be able to assist you with making a demand for repurchase under the California Consumers Legal Remedies Act.

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Answered on 8/18/17, 2:08 pm


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