Withdrawal from a Vehicle Purchase Agreement

Article chapters:

• Backing out of a vehicle purchase contract
• I’ve purchased a vehicle from a used car dealer, and it broke down after a few months. What now?
• How to proceed about hidden vehicle faults
• Cancelling a used vehicle purchase contract – when is it possible?
• Claiming defects on new vehicles

Backing out of a vehicle purchase contract

Purchasing a used car always represents buying a pig in the poke. However, the figurative pig may be inedible or even stolen.

The Czech legislation concerning defects and warranty has recently emerged from a truly topsy-turvy period. We don’t have the room here to delve into the debate on whether or not the mandatory 2-year warranty on consumer goods has been abolished; nonetheless, one thing is certain: Newly, the warranty (also applying to second-hand goods) needn’t be stipulated in a written agreement, as mentioning the guarantee period even in an instruction manual or advertisement binds the seller. For example, a flyer by a pre-owned car dealer or a commercial on the radio promising an extra 7-year warranty will suffice. However, we advise to somehow keep it (e.g., to save a screenshot), so that you can provide evidence in the eventual process.

Which used vehicle faults can’t be claimed?

Before you even start considering withdrawal from your contract, make sure that the defect at hand doesn’t fall into one of the following categories that may not be claimed:

1. A fault due to which the vehicle was discounted, or which the seller or authorized employee pointed out – read the handover protocol or purchase agreement carefully, as it ought to be specified therein.
2. A fault that occurs due to usual wear and tear – for instance, a damper with a lifespan of 180,000 km may not be claimed if the car’s mileage reached 175,000 km, and the damper has never been replaced

Your Attorneys Online advise: “A buyer may only successfully complain about a defect that manifests itself within the warranty period, which usually means 24 months; however, with used cars, it’s often reduced to a year. The seller must inform you about this reduction during the transaction, i.e., include it within the vehicle purchase agreement.”

I’ve purchased a vehicle from a used car dealer, and it broke down after a few months. What now?

Unless the fault was duly pointed out or pertains to the usual wear and tear as previously discussed , it’s deemed hidden. The Civil Code states that if a hidden fault manifests itself within 6 months from the handover, the vehicle was already defective as of the signing of the purchase contract. As a consequence, the seller is responsible for such fault, and you’re entitled to complain.

Your Attorneys Online advise: “Frequently, car dealers reject the claim and object that the fault occurred after the handover and is the result of service wear. Don’t let this discourage you. Such an approach is unlawful, and any dealer insisting on their claim must prove that the fault indeed occurred after you took possession of the vehicle. If they’re unable to, it’s they who bear the responsibility for the hidden fault.”

When claiming hidden faults, any provisions along the lines of “the buyer has thoroughly familiarized themselves with the technical condition of the vehicle” or “the seller shall not be held liable for any defects” that the agreement may contain are utterly void and serve merely to discourage the purchaser.

Purchasing a used vehicle from a physical person is different

Although the 6-month warranty of hidden defects remains the same here, it is you who must establish your claim. Therefore, seek counsel with a mechanic or obtain an expert opinion first, and only then contact the original owner. If they reject your claim, you’ll have to resort to taking legal action.

How to proceed about hidden vehicle faults

1. Obtain an expert opinion from a service department,
2. Contact the seller in writing, informing them about the hidden defect that was not pointed out during the purchase,
3. Enclose the expert opinion, the date of purchase, describe the vehicle as well as the fault, and suggest a solution.

Your Attorneys Online advise: “Do not repair the defect. It is necessary that the vehicle remains in the condition it was in when the defect manifested itself. Fixing it would render your complaint moot.”

If the car dealer accepts your claim, do insist on drawing up a protocol of claim and keep a copy. As of then, a 30-day period commences, during which your claim must be resolved. Also, make sure that the protocol specifies how the matter will be remedied.

If your complaint is rejected, a court-sworn expert will assess the vehicle’s condition. For that reason, we recommend to keep as many documents as possible to evidence the defect.

Cancelling a used vehicle purchase contract – when is it possible?

When complaining about a second-hand car, you’re entitled either to a discount, or to the removal of the defect. You may call for a withdrawal from the vehicle purchase agreement when the fault occurs repeatedly, or if the car had multiple defects.

Also, you may back out of the agreement and demand a refund when the seller fails to resolve your complaint within the 30-day period, by which they breach the contract.

Claiming defects on new vehicles

A. You’ve purchased the vehicle as a consumer (not an entrepreneur)

Your car comes with a 2-year warranty covering any fault, including a hidden one. Let’s quote the Czech Civil Code:

“(1) A seller is liable to a buyer for a defect-free condition of a thing upon takeover. A seller is in particular liable to ensure that at the time the buyer takes over the thing:

1. a) the thing has the properties stipulated by the parties, and in the absence of such a stipulation such properties which the seller or producer described, or which the buyer expected given the nature of the goods concerned and the advertising presented by the seller or producer,
2. b) the thing is suitable to be used for the purpose stated by the seller or to which the thing of such kind is usually used,
3. c) the thing’s quality or design corresponds to the agreed sample or model if such quality or design was determined on the basis of an agreed sample or model,
4. d) the thing has the quantity, measurement or weight and
5. e) the thing meets the requirements laid down by legal regulations.”

Evidencing defects of a new vehicle

The seller is liable for faults that manifest themselves during the warranty period. However, the condition that the defect already existed at the time of the handover still stands. The burden of proof lies with the seller within the first 6 months and is subsequently conveyed to the buyer (as with the purchase of a used car). In practice, however, Czech car dealers usually accept their responsibility for the whole warranty period, so the purchaser needn’t prove anything.

Cancelling a new vehicle purchase contract

When complaining about a new car, the buyer may demand the delivery of a new part, the removal of the defect, a discount from the purchasing price, a new vehicle (only when relevant to the nature of the defect), or, ultimately, a withdrawal from the agreement

The buyer has the right to withdraw if:

• The defect proves impossible to repair,
• the defect is fixed, but reappears,
• the defect isn’t removed within 30 days of filing the claim.

B. You’ve purchased the vehicle as an entrepreneur

The law defines no warranty for such purchase agreements. The seller is only liable for hidden defects (those that existed at the time of the handover). If you’re buying a business car, make sure to note any agreement provisions limiting your complaint rights. Typically, these bind the purchaser to conduct regular checks in an authorized repair shop, or to a mandatory annual vehicle inspection. These provisions could be easily overlooked, which would result in the loss of your warranty.

Are you facing difficulties while cancelling a vehicle purchase agreement? Or do you seek counsel in such a situation? Order our Consultation with a lawyer and obtain a solution within 48 hours.