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§3.08 Vehicle Sales—Buyer’s Remedies

Lesson 3:
Vehicle Repairs, Sales, & Leases

The buyer may seek the following relief when the seller has not corrected a violation of the Rees-Levering Sales Act:

  • Rescission and refund: If the seller violates CC §2981.9 (single document, fully completed contract, and other contract requisites), §2982(a) (disclosure of amount financed), §2982(j) (dollar limits on finance charges), or §2982(k) (default period and delinquency charges), the contract is not enforceable. [CC §2983; Nelson v Pearson Ford Co. (2010) 186 CA4th 983, 1005 (backdating second contract violated disclosure requirements and single-document rule).] The buyer may either retain the motor vehicle and continue performance under the contract, or with reasonable diligence, rescind the contract, return the vehicle, and recover the amount paid to the seller. No offset is allowed for use of the vehicle. If the downpayment included a “trade in,” the amount recoverable is its agreed value as stated in the contract or its fair market value, whichever is greater. [CC §2983(a).] A conditional sale contract executed or entered into on or after January 1, 2012, is not made unenforceable solely because of a seller’s violation of Section 2982(a)(2) or (5). In addition to any other remedies that may be available, the buyer is entitled to any actual damages sustained as a result of a violation of those provisions. [CC §2983(b).]

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  • Refund: Any payment made by a buyer to a seller pending execution of a conditional sale contract must be refunded to the buyer if the contract is not executed. [CC §2982.7(a).]

  • Rescission when no financing: A contract conditioned on the buyer obtaining third-party financing is rescinded, and all consideration must be returned, if the buyer is unable to obtain the financing. [CC §§2982.5(b), 2982.9.]

  • Penalties: If the seller violates any part of CC §2982(l) (regarding prepayment of contract and refund of unearned finance charge), unless the violation was the result of an accidental or bona fide error of computation, the buyer may recover from the seller three times the amount of the finance charge paid to the seller. [CC §2983.1(a).] In addition, a seller that unlawfully fails to comply with a court order to produce relevant documents that were required to be saved is liable for a civil penalty of $5000 per violation. [CC §2984.5(b).]
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