July 16th， according to CCTV， a case in Shanghai has shed light on a common concern for used car buyers: can you get a refund if you discover a car has a dark past， even if its performance isn’t directly affected? The Jinshan District People’s Court in Shanghai recently shared a typical case that addresses this issue.
The report details that on February 18， 2023， Mr. Zhang purchased a used car from a used car company for 164，000 yuan. At the time of sale， the company guaranteed that the vehicle had no history of accidents， water damage， or fire damage.
However， in September of last year， Mr. Zhang discovered that the car had been involved in a traffic accident in November 2022. Although the vehicle itself sustained no damage， the accident resulted in a fatality. Consequently， Mr. Zhang filed a lawsuit， seeking to rescind the “Motor Vehicle Trading Contract” on the grounds of a material mistake. He requested the company to refund the purchase price and compensate for his losses.
Mr. Zhang argued that the significant accident involving a fatality， even if it didn’t physically compromise the vehicle’s mechanical condition， had severely depreciated its market value and liquidity in the eyes of the general public. He further contended that this undisclosed fact directly impacted his purchasing decision. He believed he had made the purchase under a material misunderstanding of the vehicle’s true history and that the contract should be invalidated. Given the company’s role in providing incomplete information that led to his purchase， he sought compensation for his losses.
The used car company， however， maintained that they were unaware of the fatal accident at the time of sale. They asserted that the vehicle was fully functional with no quality issues and therefore opposed the rescission of the contract.
The court， after reviewing the case， acknowledged that the vehicle had indeed been involved in a fatal traffic accident. While the car itself was not physically damaged and thus not a “wreck” in the strictest sense， the court recognized that such an incident would inevitably affect the vehicle’s market value. The court also pointed out that while the company may not have intentionally concealed the truth， their failure to conduct a comprehensive inspection and their lack of due diligence resulted in incomplete information being provided to Mr. Zhang. This incomplete information was a significant factor in his decision to purchase the car.
From a consumer’s perspective， the court noted that the fact that the accident resulted in a fatality created a substantial discrepancy with Mr. Zhang’s understanding of the car being “accident-free.” This information would undoubtedly have a major impact on the vehicle’s value and Mr. Zhang’s purchasing decision. The court concluded that without this misunderstanding， Mr. Zhang would not have agreed to the purchase， thus constituting a material misrepresentation. As a result， Mr. Zhang’s act of signing the contract was deemed to be based on a material mistake.
Ultimately， the Jinshan District People’s Court ruled to revoke the “Motor Vehicle Trading Contract” signed between Mr. Zhang and the used car trading company. The company was ordered to refund Mr. Zhang the purchase price of 164，000 yuan and complete the necessary procedures for the vehicle’s ownership transfer.
