Don’t underestimate the car purchase contract

Beware of registration

A wise man once wrote on social media that the most expensive thousand-dollar bill is the one he saved on legal representation.

Mr Martin, who underestimated the transfer of his car until his hair almost turned white, might have thought exactly the same. Until 2022, the sale and subsequent transfer of the car was done by the seller deregistering the car at “his” office, sending the registration certificate to the new owner, who then registered the car at his place of residence. In the meantime, the new owner had time to arrange a registration check and compulsory liability insurance. Mr Martin was used to this procedure and so did not feel the need to prepare properly for the sale of the car.

Now, however, the transfer has to take place at the seller’s permanent residence at the same time, as the documentation for the car is stored there. Both the seller and the buyer have to be there.

Mr Martin relied on the transfer being completed “later”, took possession of the car and waited to hear from the seller.

However, he suddenly put his head up. He lost interest in the transfer and the car was in danger of being removed from the register. We stepped in and helped Mr Martin complete the transfer after much wrangling. However, if he had also included this duty of efficiency in the original contract, he could have saved a considerable amount of money and, above all, avoided the stress.

We therefore recommend that buyers in particular should have a power of attorney (it must be with an officially certified signature) issued during the transfer. A car that has been deregistered by the original owner but not yet registered by the new owner cannot be registered. We will be happy to prepare a power of attorney for you with instructions on how to proceed in your specific case.

How to claim defects

Mrs Janka also caused herself unnecessary wrinkles with imperfect contractual documentation when selling the car. The car dealership sold her a defective car. Do you know the Monte Karlo car dealership? It was something similar.

When she complained, they laughed at her. She was about to give up her money, but she finally came to us.

Now, the warranty (even for used goods) does not have to be in writing in the contract, because even the warranty period in the manual or in the advertisement is simply valid. For example, a leaflet from a car dealership or a radio advertisement mentioning a superior, e.g. seven-year warranty will suffice. However, it is advisable to keep such an advertisement (e.g. a printscreen from a computer screen) to avoid a lack of evidence in any proceedings. Fortunately, Mrs Janka had the leaflet.

The new Civil Code also increases the variety of possible claims. For hidden defects, they can be notified within two years of the handover of the car to the buyer. Depending on the nature of the defect, the buyer is then entitled to a replacement of the defective item, a repair, a discount, or cancellation of the contract and a refund.

However, the law prefers replacement or repair, which is perhaps the most significant change in philosophy. The injured party should not be punished twice. He is punished once by damage to the car (dropped exhaust) and a second time by the loss of time and other expenses in arranging the repair. The new Civil Code therefore grants the right to repair as a whole and, where appropriate, financial compensation that at least allows the purchase of a conveniently available alternative.

In the end, the car dealer agreed to the compensation with gnashing of teeth.

What if someone sold me a stolen car?

Another possible scenario is that the car is sold to you by the thief or his middleman. Do you have to return the car to its original owner? This is a question that has no fair solution. In order not to have to return the car, you must be in good faith when you enter into the contract of sale. In other words, the other party looks solid, has all the documents in order and there is no reason to think that they have actually acquired the car by some unfair means (for example, by theft).

However, in the case of a second-hand purchase (typically a used car), this is not enough. The law gives the original owner the opportunity to recover the item if he or she proves that he or she has lost the item involuntarily (i.e., by arbitrary taking, theft, or loss). This applies even if the acquirer was in good faith. However, there is a limit of three years, after which the original owner cannot successfully bring his claim.

After three years from the purchase, the purchaser can therefore rest easy. However, as a precautionary measure, it is always advisable to insist on the production of all documents, including the VIN number of the body, which can at least be used to compare the car with the database of reported thefts. The best prevention of problems, however, is always a good quality car sale contract prepared by a solicitor. Thus, one should be warned against free designs that often create problems rather than solve them.