Deception Regarding the Previous Owner of a Second-Hand Car

(based on ruling 74113 of the Eretz Hemdah-Gazit Rabbinical Courts)


Case : The plaintiff (=pl) bought an already second-hand car from the defendants (=def) for 54,500 shekels – 1,100 shekels less than themechiron (buyer’s guide) suggests for such a car. Pl asked whether the first owner was a private owner or a company (the latter lowers the suggested price by at least 10% because drivers of a company car take worse care of it). Def said that it was privately owned but did not present documentation to prove it. A couple months after buying it, pl found the sticker of a leasing company hidden in the trunk and, after visiting the Department of Motor Vehicles, learned that it had been owned by a company. He demands a return of 5,560, (10% off the mechiron price).Def say that his company’s car officer found him the car but that he did not realize that it had been owned by the company. Also, the car was recently inspected and was in perfect shape, and they would not have agreed to sell it for less even if they had known it had been company owned. If pl wants, def will take the car back, as long as pl pays rent for the months he used it. Also, since pl did not bother finding out from the DMV who the previous owner was, we see he did not care who it was. Finally, def already gave a discount and told pl that he should, therefore, not be able to make any complaints.

Ruling: Hiding a significant fact about the merchandise that lowers its price turns the sale into mekach taut, even if the price changes less than one sixth (the cut-off point for the laws of ona’ah (mispricing)) (Maharsham III:181). This is different from mispricing, where less than a sixth is insignificant, primarily because price is flexible and we assume a person relinquishes claims to small errors, which he does not do regarding an incorrect fact.

P'ninat Mishpat (703)

Various Rabbis

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363 - Partner or Employee?

364 - Deception Regarding the Previous Owner of a Second-Hand Car

365 - Is a Contractor Responsibile for the Theft of Some of his Work?

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Classically, a significant blemish is grounds for nullifying the sale rather than returning the projected price difference. There are cases when the flaw is not the type that deters someone from buying the object, but its price difference is to be returned (Rama, Choshen Mishpat 233:1, based on Terumat Hadeshen) even if the difference is less than a sixth (Pitchei Teshuva ad loc.). Some argue with the Terumat Hadeshen and say that the money is returned only when the object cannot be returned after the sale.
In this case, if pl asked to cancel the sale, we would do so, because many people who would buy a privately-owned car would not buy a company-owned car. In this case, pl does not want to return the car, partially because he has invested money in it.
Def’s claim that pl should have checked with the authorities is rejected because that makes a difference only when the buyer said nothing about the issue from the outset and when it is simple for the buyer to check, neither of which are true in this case. Def’s statement that pl should accept it no matter what he finds is not pertinent because one can waive complaints about merchandise only when he knows what the problems are (Shulchan Aruch, CM 232:7).
We do not accept pl’s claim that he should receive the price difference tacked on to the discount he received. Part of the logic of the discount was that def did not have proof of who the previous owner was and thus he cannot take two deductions for the same thing. Also, we have no proof that def would have given a discount on an already depreciated car. Therefore, only 4,460 shekels are to be returned to plso that the amount now paid will match the mechiron price.