Used SUV with Concealed Frame Repair
On 15 January D, a used-car dealer, sells C a 2019 SUV for ¥1,800,000. The contract says: 'Sold as-is. Buyer confirms no reliance on any oral statement about condition.' D's salesman orally states, 'This one has never been in an accident; frame is clean.' D's file contains an auction sheet marked 'frame repair, grade R' and a ¥420,000 repair invoice dated six months earlier. C asks twice about accident history; the salesman repeats 'clean.' C pays and takes delivery. In September C tries to trade in the SUV; an appraiser finds frame repair and values it at ¥1,050,000. C demands rescission and ¥750,000. D says the as-is clause bars any claim and that C inspected the car. C looked at the exterior but not the frame and has driven 9,000 km. C did not learn of the repair until the appraisal.
1. Can C rescind for fraud or mistake despite the as-is clause?
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Fraud is the stronger claim. The salesman represented a fact, 'never in an accident; frame is clean,' that was false. D knew the truth: the auction sheet marked frame repair and the repair invoice were in D's file. C asked twice and relied on the answer. The as-is clause cannot shield intentional concealment; a seller cannot contract out of fraud. The clause might limit ordinary quality warranty, but it does not bar rescission for deceit. Mistake is possible but harder because C's mistake was induced. C's exterior inspection does not defeat reliance: frame damage is hidden and D had superior information. C should plead fraud primarily and mistake alternatively.
2. What damages may C recover, and how is the as-is clause treated?
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Rescission unwinds the sale: C returns the SUV and D refunds the price, with an adjustment for C's 9,000 km use. C can also claim tort damages for the difference between price paid and actual value, ¥750,000, and reliance expenses, but cannot double recover. If rescission is impractical, C can keep the car and claim damages. The as-is clause is ineffective for fraud; if it is a standard term, it may also be unfair. D's argument that C inspected the car fails because the defect was concealed and C asked specifically. C must prove the repair predated sale and the value drop.
3. Does C's delay or continued use bar rescission?
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Not automatically. C did not know of the repair until September, so continued use before discovery is not ratification. After discovery, C should not keep using the car in a way that signals acceptance; demanding rescission and preserving evidence is proper. Delay can matter if the statutory period expires or if D shows prejudice, but the facts do not show either. The 9,000 km affects the use-offset, not the right. If C delays after learning and acts inconsistently, a court may find ratification. C should return or tender the car promptly and avoid further unnecessary mileage.