Withdrawal from a car purchase contract

Quick overview:

• You can withdraw from the contract if there is a material defect.

• For consumers, there is a 24-month liability period for defects.

• If the defect becomes apparent within 12 months, it is deemed to have existed at the time of receipt.

• Failure to settle a claim within 30 days allows you to withdraw.

If you are unsure whether a defect is material, you can have the situation quickly assessed by our online legal consultation.

Withdrawing from a car purchase contract

When we buy a used car, we’re kind of buying a rabbit in the bag every time. But that rabbit may be inedible or even stolen.

In the area of defects and warranties, Czech law has undergone a real upheaval. There is no room here to examine the debate on whether or not the mandatory two-year warranty for consumer goods has been abolished. What is certain, however, is that now the warranty (even for second-hand goods) does not have to be set out in writing in the contract, since even the indication of the warranty period in the manual or in the advertisement will have binding effects on the seller.

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 somehow (e.g. a print screen from a computer screen) to avoid a lack of evidence in any proceedings.

Which defects cannot be claimed for a used car?

Before withdrawing from a vehicle purchase contract, make sure that the defect does not fall into the following categories. In the following situations, the car cannot be claimed:

1. A defect for which you received a discount when you bought the car, or which was brought to your attention by the dealership or the seller directly – check the handover report or contract, which should specify the defects properly.
2. A defect that corresponds to the level of use or wear and tear of the car – for example, a shock absorber that the manufacturer states has a life cycle of 180,000 km cannot be claimed if it has been driven for around 175,000 km and the shock absorber has never been replaced.

An available solicitor advises, “For the buyer to cancel the car purchase contract, the defect must have manifested itself before the expiry of the warranty period. This is normally 24 months, but can be halved for used cars. When you buy the car, the dealer must inform you of the shortened period, i.e. define it directly in the car purchase contract. If you use a simple car purchase contract downloaded from the internet, make sure it includes a clause about any warranty. You should also consider consulting a lawyer or using a certified model contract.”

The car stopped working after a couple of months. What to do?

If the defect was not obvious or caused by wear and tear, as we wrote above, and the buyer did not inform you about it (the defect is not described in the purchase contract), then the defect is considered a hidden defect. According to the Civil Code, if the latent defect manifests itself within 12 months of taking delivery of the car, the car is deemed to have been defective at the time of signing the contract of sale. In such a situation, the seller is liable for the defects and you have the right to claim.

In these cases, it is usually crucial whether it can be proven that the cause of the defect existed at the time of sale. We often deal with situations where only an expert’s report reveals that the problem was caused by long-term wear and tear that must have existed when the vehicle was taken over.

In practice, it is often unclear whether this is still normal wear and tear or a hidden defect. If you are not sure whether it is indeed a hidden defect and whether you have the right to withdraw from the contract, you can have the situation quickly assessed by our online legal consultation.

An available solicitor advises, “We often encounter cases where car dealerships reject a claim and argue that the defect occurred after acceptance and is the result of operational wear and tear. Don’t be discouraged. This is unlawful and if the car dealership insists on its decision, it must prove that the defect really occurred after the car was handed over. If this is the case, the car dealer is still liable for the hidden defect in the vehicle.”

In the case of a claim for hidden defects, the quotations in the car purchase contract to the effect that “the buyer has familiarised himself with the condition of the vehicle” and “the seller is not liable for any defects” do not play a role. These are statements with no legal significance and serve only to deter consumers.

The situation is different when withdrawing from a contract of sale of a car bought from a private person

When buying from a private person, the consumer purchase regime does not apply. The buyer must point out the defect without undue delay after he could have discovered it, but no later than 6 months after taking delivery of the goods. It is therefore necessary to get expert advice and, if necessary, an expert’s report before contacting the original owner. If the claim is not accepted, a lawyer and the courts will be involved.

In these cases, we often find that the buyer mistakenly assumes the same protection as when buying from a car dealership. However, in private sales, the evidentiary situation is usually considerably more complex.

How do I go about finding hidden defects in a car?

1. Get a professional report from the garage.
2. Then contact the seller in writing and inform him of the hidden defect that you were not aware of at the time of the sale.
3. Include in your letter the garage’s report, the date of purchase, a description of the car you bought and the hidden defect that has occurred, and a proposal for resolving the situation.

An available attorney advises, “Do not repair the defect in the car. It must remain in the same condition as the defect for the duration of the claim. By repairing it, you would lose the ability to make a claim.”

If the car dealer accepts your claim, then insist on writing a claim report and keep a copy. The 30-day statutory time limit for handling a claim starts when the claim is made. Similarly, make sure that the complaint report states the remedy.

If the claim is not acknowledged and a dispute ensues, the condition of the vehicle will be assessed by a forensic expert. We recommend that you keep as many documents as possible to prove the previous condition.

Withdrawal from a used car purchase contract – when is it possible?

In the event of a used car claim, you are entitled to a discount on the purchase price or to have the defect rectified. If the defect has occurred repeatedly after the claim or if there are multiple defects, in this case you can request withdrawal from the car purchase contract.

Similarly, if the 30-day claim period has expired and the dealer fails to deal with it, then they are in material breach of contract, in which case you can withdraw from the contract and claim your money back.

Whether this is a material breach of contract tends to be the most common point of dispute in practice. The courts always assess the severity of a defect on an individual basis – for example, there is a difference between a minor air conditioning fault and a major engine fault.

How do I claim for defects in a new car?

A. If you bought the car as a consumer (non-business person)

Then the car is covered by a 24-month warranty that covers not only hidden defects but any other defects. According to the Civil Code, the seller is liable for the following:

“(1) The seller is liable to the buyer that the item is free from defects upon receipt. In particular, the seller is liable to the buyer that at the time the buyer took possession of the item,

1. (a) the goods have the characteristics agreed between the parties and, in the absence of agreement, such characteristics as the seller or the manufacturer described or the buyer expected in view of the nature of the goods and on the basis of the advertising carried out by them,
2. (b) the thing is fit for the purpose for which the seller states it is to be used or for which a thing of that kind is usually used,
3. (c) the goods correspond in quality or workmanship to the agreed sample or specimen if the quality or workmanship was determined by reference to the agreed sample or specimen,
4. (d) the item is in the appropriate quantity, measure or weight; and
5. (e) the item complies with the requirements of the legislation.”

Unfulfilled expectations or purpose may not only be due to technical defects, but also, for example, to the fact that a seller offers vehicles on the basis that they are suitable for a certain number of people and this turns out not to be the case.

Proving defects in a new car

For a new car, the seller is responsible for defects that appear during the warranty period. However, the condition that the defect existed at the time of acceptance also applies here. The burden of proof lies with the seller for the first 12 months, then with the buyer (as with a used car). In practice, however, sellers usually accept their liability for the full 24 months of the warranty without the buyer having to prove when the defect occurred.

If the burden of proof is already on your side, we can help you prepare the right argument and the next course of action against the seller.

What about rescission of the purchase contract for a new car?

As part of a new car claim, the buyer can demand the supply of a new part, the rectification of the defect, a discount on the purchase price, the supply of a new car (if this is in line with the nature of the defect) and , as a last resort, the withdrawal from the car purchase contract.

The buyer has the right to withdraw if:

• an irremediable defect,
• a remediable defect that has occurred repeatedly,
• a defect that has not been rectified within 30 days of its occurrence.

B. If you bought the car as a business

In this case, it is a contract of sale, for which there is no warranty by law. The seller is only liable for latent defects (those existing at the time of handover). If you are buying a car as a business, beware of clauses in the contract of sale that limit your rights to claim for the car.

These include, for example, the obligation to have the car serviced at an authorised garage or a compulsory annual inspection. Often these clauses are overlooked, but at the same time you risk losing your warranty if you don’t comply.

What about cancelling a contract for a car bought by a business?

In the context of a business , you are only entitled to withdraw from the purchase contract of a car if it shows defects that were already present when you took delivery of it. At the same time, the defects must be such as to make it impossible to use it for its intended purpose. This example also demonstrates the importance of a properly concluded purchase contract which specifies in detail the claim and the possibility of withdrawal.

Do you know how to formulate a claim or withdrawal correctly? We will prepare a document that meets all the legal requirements and will stand up to any dispute.

Withdrawal from the car purchase contract – model

In the event of problems with the car, it is the contract of sale that becomes the key document. Many buyers use a so-called simple car purchase contract, often downloaded from the internet. This in itself is not wrong – but only if the template contains all the essential elements.

The model purchase agreement should always clearly state the vehicle’s identification, a statement of the vehicle’s condition, any known defects and warranty information. If the dealer provides you with a contract of your own, do not hesitate to compare it with a certified model contract of sale or consult a professional.

In the case of car dealerships or car dealers, there is a good chance that you will receive the model of the vehicle purchase contract directly from them. Otherwise, many people resort to downloading generic templates from the internet. Especially for cars where you are dealing with large sums, we urge you to be vigilant. Anonymous templates are often outdated or invalid and in any case fail to reflect the specifics of your withdrawal.

Are you dealing with complications when withdrawing from a vehicle purchase contract? Or do you want advice on what your rights are in such a situation? Get a one-stop answer from a specialist to your legal query. Within 48 hours you will be clear.

Summary

When buying a car – especially a used car – it’s important to know that the seller is liable for hidden defects in the vehicle that existed at the time of sale, even if they didn’t know about them. Under the new Civil Code, the buyer has the right to demand repairs, a reasonable discount on the purchase price or, in serious cases, to withdraw from the contract. A hidden defect is one that cannot be detected by a normal inspection – typically engine, transmission, electronics or a twisted speedometer. If the defect becomes apparent within 12 months of taking delivery of the car, it is deemed to have been present when the car was bought. In the case of used cars, the length of liability for defects can be reduced, but only if this was expressly agreed in the contract and the buyer agrees to it. In the event of a dispute, the buyer has the right to demand a claim, an expert’s report and, if necessary, a refund of the purchase price. Therefore, it is crucial to have a well-drafted car purchase contract and, if in doubt, contact a lawyer to help defend your rights.