By Jordan W. Charness

“Come on baby. Just a little bit further. You can do it,” Tommy pleaded with his car. Tommy was a travelling salesman. His territory was huge: all of Quebec, the Maritime provinces and Ontario. He put thousands of kilometres a year on his car and his poor car was on its last legs. Tommy was hoping that the sale that he had been working on for several months would finally come through. If it did, he would be able to afford a brand new car. If only his old car would just take him to his destination.

Tommy was in luck. He made it to Windsor, Ontario and successfully concluded his big sale. Unfortunately, on his way home his luck deserted him. His long suffering car finally gave up and died on the side of the highway. The garage he was towed to suggested that it really was not worth his while to repair the car as the repairs would far exceed the value of the vehicle.

While Tommy was sitting in the garage waiting room he read the local newspaper and saw that one of the Ontario dealers was offering new cars at a less than one percent finance charge on purchases. He went over to the dealer and bought a brand new minivan. He was extremely pleased with his purchase and enjoyed every minute of his drive home.

Tommy purchased an extended warranty for the car but was pleased to note that he did not need any repairs in the first seven months that he owned the car. He did however notice that the rear hatch of the van was starting to rust. Since the car came with a five-year anti-rust warranty he took it into a local Montreal dealer who said that he would be pleased to honour the manufacturer’s warranty even though the car was purchased in another province.

According to law, all manufacturer’s warranties for cars must be honoured by any dealer from the same manufacturer. In fact you have the right to decide to have your car repaired at a different dealership from the one where you purchased your car and still have the warranty pay for the repair.

A couple of days later Tommy got a call from the dealer to say that, unfortunately, the repair to his car could not be covered by the warranty. According to section 3 of the guarantee his car was not covered for rust that occurs as a result of an accident or at the part of the car that was repaired as a result of a collision.

Tommy was flabbergasted! He had never been in an automobile accident in his life. He had never even dinged his brand-new car. He called the dealer from whom he purchased his car and asked them to search their records. Although he had bought a car with only 10 kilometres on the odometer, he was told that there had been an accident on the dealer’s lot. Apparently one of the dealer’s employees had accidentally backed the car into a post causing about twelve hundred dollars worth of damage.

The dealer immediately had the car repaired and the dent repainted. It was then put back on the lot and sold to Tommy as a brand new car. Technically it was indeed a brand new car. However, was also a vehicle with a collision history. The Montreal dealership was completely within its rights to refuse to do the repairs under the warranty.

Tommy asked the Ontario dealer what he was going to do about it. The dealer suggested that he bring the car back to Ontario where they would have it repaired free of charge. This was not a solution that appealed to Tommy in the slightest. He drove enough kilometres every year. He certainly did not want to drive another thousand kilometres or so round-trip just to have his car repaired for an accident that he never had.

The Montreal dealer tried to help and called the Ontario dealer. Unfortunately, no easy solution could be found. Tommy complained to the consumer affairs office in Ontario and they opened a file and got in touch with the Ontario dealer.

At this point the Ontario dealer agreed to pay the Montreal dealer to do the repair. This no longer satisfied Tommy who claimed that he thought he bought a brand-new car. In his mind, “brand new” also meant accident-free. Now he wanted to return the car and get a new one for free.

Sometimes the law does allow the cancellation of a contract when there is a material error in the object of the contract. In this case, Tommy’s insistence that he would never have purchased that particular vehicle if he’d known of its accident history might have been enough to cancel the contract.

Unfortunately, in order for this type of cancellation to work the parties must both be put back into the same position that they were in before they entered the contract. That would mean that the dealer would get its car back and Tommy would get his money back. Although Tommy could get his money the dealer would receive a car with 20,000 kilometres on it. This is not putting the parties back in the position where they were before the contract. Instead of the dealer having a brand new car with a small accident history he would have a car with 20,000 kilometres on it.

It took a little more negotiating and the help of lawyer before the parties finally came to an agreement. The dealer would have the car fixed in Montreal and would refund 3000 dollars of Tommy’s purchase price to make up for the fact that the car had been slightly damaged. The dealer also guaranteed that if the car ever began to rust again in that part of the car the dealer would have it repaired at his expense throughout the life of the warranty.

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