Earth Research | Rules for Determining Fraud in Used Car Transactions

Case One (Constitutes Fraud): Civil Retrial Judgment for Sales Contract Dispute between Wu Gengzhen and Fuzhou Zhong Sheng Toyota Automobile Sales Co., Ltd.

Case No.: (2020)闽民再329号

Adjudication Rule: The mileage of a used car is important data in used car sales, directly affecting the valuation of the used car and the consumer's willingness to purchase. As a professional vehicle sales company, a used car company has the ability to verify and confirm the true mileage of the used cars it sells. When selling a vehicle, if the used car company was aware of the discrepancy between the displayed mileage and the actual mileage, and whether it intentionally concealed the true situation or intentionally provided false information to mislead consumers, and if there is no other evidence sufficient to prove that the used car company did not intentionally conceal the actual mileage when selling the vehicle, it should be determined that the used car company knew that the displayed mileage of the disputed vehicle did not match the actual mileage, thus constituting fraud.

Case Two (Does Not Constitute Fraud): Civil Appellate Judgment for Sales Contract Dispute between Cai Renzhou and Shanghai Lixing Used Motor Vehicle Brokerage and Distribution Co., Ltd.

Case No.: (2020)沪02民终5363号

Case Facts: Mr. Cai purchased a Smart sedan through a used car dealer, and a

The court, upon review, held that Mr. Cai admitted to being informed during the car purchase process that the disputed vehicle had incurred relevant medical expenses due to a traffic accident, thus Mr. Cai was aware that the disputed vehicle had been involved in an accident. Secondly, what Mr. Cai purchased from Lixing Company was a

Case Three (Constitutes Fraud): Civil Appellate Judgment for Sales Contract Dispute between Huang Jianping and Jiangxi Qingling Automobile Sales and Service Co., Ltd.

Case No.: (2019)赣07民终1160号

Case Facts: Plaintiff Huang Jianping signed a car sales contract with Defendant Dingshang Company, agreeing to purchase a white Qingling brand car at a uniform price of 114,800 yuan. Mr. Yang, an employee of Qingling Company, signed as the vehicle deliverer, and Zheng Shishun signed as the acceptor on the new car exit inspection form. In the

The court, upon review, held that the vehicle involved in the case had defects such as repaint on the hood and right fender, disassembled bumper, and replaced headlights before being delivered to the plaintiff for use. Regarding whether it constitutes fraud. After the vehicle was delivered, Qingling Company then informed the defendant Dingshang Company that "the bumper had been removed, the lights had been replaced, and this could not be told to the customer." ， However, according to Article 68 of the "Opinions of the Supreme People's Court on the Implementation of Several Issues Concerning the General Principles of the Civil Law of the People's Republic of China (Trial Implementation)", which states that "if one party intentionally informs the other party of false information, or intentionally conceals the true situation, inducing the other party to make a mistaken expression of intent, it can be deemed as fraudulent behavior", Qingling Company's deliberate concealment infringed upon the plaintiff's right to know and harmed the plaintiff's psychological feelings, thus constituting consumer fraud.

Case 4 (No fraud constituted) Zhao Mou v. Shanghai Yongda Beiwo Automobile Sales Service Co., Ltd. Sales Contract Dispute Case

Case No.: (2020) Hu 01 Min Zhong No. 9810

Case Facts: The plaintiff, Zhao Mou, sued, claiming that he was invited by Xia Moumou, a sales representative of the defendant Shanghai Yongda Beiwo Automobile Sales Service Co., Ltd., to visit the defendant's 4S store to view a Volvo 2019 V40 sedan. Later, Xia Moumou recommended a 2016 V40 sedan to the plaintiff, stating that the car had all the functions requested by the plaintiff (keyless entry, navigation, blind spot warning, tire pressure monitoring, etc.). During the test drive, Xia Moumou did not demonstrate the relevant functions to the plaintiff, and the contract stated that the vehicle had not been involved in any collision accidents. After returning home, the plaintiff repeatedly confirmed with Xia Moumou via WeChat, and Xia Moumou consistently stated that all functions requested by the plaintiff were available. After picking up the car, the plaintiff discovered that the car did not have blind spot warning, tire pressure monitoring, and other functions. The vehicle's repair records showed that the car had its headlights replaced and had been repainted. The plaintiff believes that the defendant was involved in contractual fraud and lacked business integrity during the sales period, and therefore requested three times the compensation.

After hearing, the court held that the plaintiff had conducted a test drive, and the plaintiff did not have sufficient evidence to prove that the defendant intentionally concealed fraudulent behavior. The transfer agreement signed by both parties stipulated that Zhao Mou agreed to accept the transfer according to the vehicle's existing condition, and the agreement did not clearly specify functions such as keyless entry, navigation, blind spot warning, and tire pressure monitoring. Although Zhao Mou inquired about functions such as keyless entry, navigation, and blind spot warning during communication with Yongda Company's staff, Yongda Company had flaws in its introduction of functions such as keyless entry. However, the aforementioned four functions are externally displayed features of the vehicle, and Zhao Mou could identify whether the vehicle involved had these four functions during the test drive and vehicle inspection process. Therefore, these four functions themselves are difficult to be intentionally concealed and do not constitute fraud.

As the social business environment construction becomes increasingly perfected, businesses providing goods or services to consumers should further adhere to social morality and uphold integrity. They should fully and truthfully disclose product information, and put an end to deceptive or misleading promotions. As consumers, you should enhance your awareness of legal rights protection, and when purchasing goods, pay attention to signing written contracts that clearly stipulate detailed information such as product performance and quantity.