A person purchased a car in a trade-in transaction from a company that deals in trade-in and based on a representation that the vehicle was in private hands in the past. In retrospect, it was discovered that the vehicle was previously owned by a company. The trade-in company argued, inter alia, that the car purchase agreement contained a clause exempting it from liability.
The Court held that the company is required to compensate the purchaser and that the exemption clause is not valid. The company engages in the sale of used vehicles and as a result bears increased liability towards purchasers of vehicles, and the Sale of Used Vehicles (Eligibility for Information and Proper Disclosure) Law, 2008, requires the delivery of information in a "due diligence form" and the fact that the same details appear in the car sale agreement is irrelevant because the law requires that the form be delivered before execution of the contract and separately from the contract.