People who buy used cars aren't the ones who need a cheap car,
they're the ones who need an expensive car cheaply.
Important to know
Terms in an online marketplace deal that restrict a buyer's rights contrary to the law are void under §§ 307–309 BGB — even if the seller relies on them.
Many people today can no longer imagine their lives without a car. Unfortunately, not everyone can afford to buy a new car from a dealership, and the used-car market can offer a decent option in terms of both price and the car's characteristics (mileage, make, and so on). A major advantage of such a purchase is that the buyer does not have to pay for the services of the relevant dealership. At the same time, one should not forget the well-known saying: "I am not rich enough to buy cheap things." Buying a car "second-hand" is a fairly troublesome affair, especially for those doing it for the first time. There are risks here for both the buyer and the seller. To minimise these risks, the seller and buyer conclude a sales contract for the goods — in our case, a car — in which all the previously agreed terms are set out in detail.
As we have mentioned before in our articles, German law is governed by the principle of "freedom of contract," meaning the parties are free to determine the content of a contract solely at their own discretion. The process of negotiating contract terms takes place when the offeror (the initiator) invites the other party (the counterparty) to take part in shaping the content of the contract. In cases where one party to a contract presents the other party with pre-formulated contract terms, refers to them, and uses these terms repeatedly, this is, as a rule, referred to as General Terms and Conditions for Business Transactions (German: Allgemeine Geschäftsbedingungen, AGB). The initiator need not personally draft the specific General Terms — they may simply use, on a single occasion, a third party's template created for a whole series of similar contracts.
The purpose of AGB is not only to standardise the content of the most common types of contract, such as sale and purchase, works and services contracts, residential leases, and others. AGB also make it possible to regulate and protect the legitimate interests of the parties in civil-law relationships. As a rule, General Terms are used to govern matters such as how the contract is concluded, the manner and place of performance, the procedure for settlements under the contract, retention as a means of securing performance of an obligation, the consumer's duties, the parties' liability, and the procedure for resolving disputes. The initiator's practical freedom to draft AGB is nevertheless subject to certain restrictions under §§ 307–309 of the German Civil Code (German: Bürgerliches Gesetzbuch, BGB). These restrictions exist to ensure that the principle of equality between the parties to the regulated civil-law relationship is respected. If a contract based on general terms and conditions for business transactions contains provisions that contradict the restrictive rules governing AGB, such provisions are deemed invalid.
It should also be borne in mind that any doubt in interpreting AGB is always resolved in favour of the counterparty, meaning the person who signed the contract on the terms offered to them (§ 305c Abs. 2 BGB). This means that, in a disputed case, the contract must be interpreted on the terms more favourable to the client. In this article, we describe one example from our practice in which we succeeded in defending the interests of a client who had bought an unfortunate used car "second-hand."
So, a young man — let's call him Yuri — came to our law firm, having recently become the "proud" owner of a 2010 Toyota Camry. Yuri had been planning to buy a car for his family for some time. Since he was the sole breadwinner in a family of four, buying a new car from a dealership was simply out of the question. Our future client did not want to take on debts or loans, and so, on his friends' advice, he chose a relatively inexpensive car on the popular online trading platform "eBay." At first, everything looked very appealing — the car appeared, at a glance, to be "as good as new." Knowing the quality of German roads and "German precision and thoroughness," Yuri had no doubt that there would be no problems with the car's technical condition. What's more, the seller, who was the car's second owner, assured him that, as far as he knew, the car had never been in an accident. After inspecting the car with a friend and taking it for a spin through the surrounding area, the young man decided to "strike while the iron was hot." So, after a quick look through the terms of the contract proposed by the seller, he signed it without further hesitation, transferred the money, and took away his long-awaited car.
Unfortunately, as so often happens, trouble was not long in coming. Just two weeks later, Yuri, an inexperienced but attentive driver, began to notice problems with the lights. On closer inspection of the front of the car, the young man noticed small paint defects. After a consultation at a car repair shop, he received the disappointing conclusion that the car had, unfortunately, already been seriously damaged in the past, after which the damaged parts had been repaired, and not particularly well at that. It turned out that the car's "real value" was around two thousand euros, rather than the seven and a half thousand Yuri had paid. As the saying goes, troubles never come alone: after our unlucky buyer finally read carefully through the sales contract he had signed with his own hand, he found provisions stating that the seller fully disclaimed liability for the car's technical condition and, accordingly, provided no warranty repair in the event of breakdowns or defects being discovered (German: Gewährleistung). Thus, on a literal reading of the contract, it appeared that the entire responsibility for inspecting the goods before purchase lay with the buyer. Yuri decided it was worth getting to the bottom of the situation and finding out whether it was really hopeless. That is what brought him to our law firm.
Our firm's attorney listened carefully to the client's account, reviewed the terms of the contract he had concluded, and examined the relevant case law. The attorney reached the following conclusions:
· the parties had not discussed or negotiated the terms of the contract proposed by the seller. Consequently, the sales contract had been concluded on General Terms and Conditions for Business Transactions;
· the sales contract did indeed contain a term excluding any warranty on the goods sold and disclaiming the seller's liability for defects and malfunctions in the car;
· at the same time, the clause of the contract providing for the seller's full exclusion of liability did not contain any provision stating that liability would still apply in the event of harm to life or health caused by the initiator's negligent failure to perform its duties, or by intentional or negligent breach of duty by its legal representative;
· since the sales contract had been drawn up on the basis of general terms and conditions for business transactions, any provisions that contradicted the restrictive rules governing AGB were deemed invalid.
Accordingly, the provision of the sales contract fully excluding the seller's liability and eliminating any warranty period could be regarded as invalid. This argument, not always obvious to a layperson but clear to a professional, formed the basis for defending our client's interests. The attorney prepared and sent the seller a detailed letter of claim, arguing that, for the reasons set out above, the contract provision excluding liability was not valid. It followed that the quality of the car handed over by the seller did not match the terms of the deal as agreed between the parties. In addition, the buyer had agreed to buy the car at the price offered by the seller on the understanding that the car was "accident-free." To resolve the matter, our firm's attorney proposed to the seller that the contract be rescinded by mutual agreement, with everything received under the deal returned. To our client's relief, this letter proved sufficient: within a week we received a reply from our opponent's attorney stating that the seller agreed and was prepared to return all the money received for the car to Yuri's account. In the end, the matter was resolved amicably: Yuri got back the seven and a half thousand euros he had paid, and the seller got his used car back. From a professional standpoint, it was gratifying for us to have helped our client fully resolve the matter and restore his infringed interests already at the pre-trial stage of the dispute.
In closing, we would like to share a short, instructive story. A British organisation apparently decided to help people suffering from internet addiction and bring them a little closer to everyday reality. It went about this in a rather unusual way. Among the general terms and conditions for using its public Wi-Fi hotspot (German: WLAN-Hotspot), the company included clauses such as consent to… cleaning toilets at a festival, as well as performing 1,000 hours of community service. You might think no one would volunteer for that. Quite the opposite: 22,000 people accepted the terms of the deal — accepted them by ticking that fateful little box at the end of the agreement. Few people stop to think about it, but in reality, the tick you place next to the box marked "General Terms and Conditions" carries the same weight as a signature on a contract. We advise you not to fall for this trap, and always to read carefully what you are signing. And if just such a "mishap" should happen to you, and problems arise, we look forward to seeing you at our firm, where we will always provide you with a thorough, clear consultation and help you find the best way out of your situation.
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THE LAW FIRM REPRESENTS CLIENTS' INTERESTS THROUGHOUT GERMANY
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