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this article is reproduced from [legal daily];

during this year's flood season, floods occurred in many parts of the country, resulting in frequent accidents involving flooded cars, which led to disputes over transactions involving flooded cars as normal second-hand cars. the two-level people's courts in dalian, liaoning province, handled a case in which a car sales and service company used flooded cars as normal second-hand cars. in the end, the dalian intermediate people's court upheld the first-instance court's ruling of "refund one and compensate three" against the company, safeguarding the legitimate rights and interests of second-hand car buyers.

"in the summer of 2022, mr. li accidentally lost the key to the second-hand car he bought, so he found a professional car key repairman to deal with it. surprisingly, the repairman found that the car was not equipped with an original computer. further inspection revealed that the vehicle had been soaked in water. after multiple investigations, mr. li learned that the vehicle he purchased was flooded due to a sudden flood in july 2016 and has been presumed to be a total loss by the insurance company." mr. li's litigation agent, li fuxia, a lawyer at liaoning dadong law firm, said that since mr. li and a certain automobile sales and service company failed to reach an agreement, he chose to protect his legitimate rights and interests through litigation.

after trial, the court of first instance ruled that the defendant, a certain automobile sales and service company, should refund the purchase price of rmb 460,000 to the plaintiff mr. li; the plaintiff mr. li should return the vehicle involved in the case to the defendant, a certain automobile sales and service company; and the defendant, a certain automobile sales and service company, should pay the plaintiff mr. li compensation of rmb 1.38 million.

a certain automobile sales and service company was dissatisfied with the judgment of the first instance court and appealed to the dalian intermediate people's court.

"the focus of the dispute in this case is whether the appellant committed fraud and whether the purchase price of the car should be refunded and triple compensation should be given," said the presiding judge of the dalian intermediate people's court.

regarding whether the two parties had established a sales contract relationship, the presiding judge stated that, combined with the evidence submitted and retrieved by the respondent, they could corroborate each other and prove that the two parties had established a sales contract legal relationship regarding the vehicle involved in the case.

in this case, the two copies of the "used car sales contract" were of the same standard text, both of which indicated that the contract was in triplicate. the fact that the third copy kept by the respondent, as a customer, had unclear handwriting was reasonable. although the appellant denied the authenticity of the seals affixed to the two contracts, he did not provide any evidence to prove it, nor did he apply for an appraisal of the official seal.

relevant laws and regulations have clear provisions on whether second-hand car operators have the obligation to provide buyers with the true situation and information of the use, maintenance, accidents, inspections, etc. of the vehicle. according to article 8 of the consumer protection law, "consumers have the right to know the true situation of the goods they purchase, use, or the services they receive. consumers have the right to require operators to provide the price, origin, producer, use, performance, specifications, grade, main ingredients, production date, validity period, inspection certificate, instruction manual, after-sales service, or the content, specifications, fees, etc. of the service according to the different circumstances of the goods or services." and article 14, paragraph 1 of the "second-hand car transaction specifications" stipulates that "before selling a second-hand car to a buyer, a second-hand car dealer shall inspect and prepare the vehicle." second-hand car operators have the obligation to provide buyers with the true situation and information of the use, maintenance, accidents, inspections, etc. of the vehicle.

therefore, the appellant should perform due diligence inspection and review obligations when selling the vehicle involved in the case and truthfully inform consumers of important information about the vehicle. and from the general process and basic understanding of second-hand car transactions, the appellant will also pay the corresponding price after a comprehensive inspection of the vehicle when purchasing the vehicle. combined with the evidence retrieved by the respondent, it can be confirmed that the vehicle involved in the case had a major water-soaked accident, and the residual value after the auction was about 270,000 yuan. the appellant sold it for 460,000 yuan, which obviously exceeded the original value of the vehicle involved in the case after the accident. in the absence of other contrary evidence, it should be determined that the appellant was aware of the fact that the vehicle involved in the case had a major water-soaked accident, and the vehicle accident information was important information that the appellant should have informed the respondent when selling the vehicle involved in the case, which was sufficient to affect whether he purchased it. however, the appellant did not provide any evidence to prove that he informed the respondent of the fact that the vehicle involved in the case had a major water-soaked accident, and should bear the adverse consequences of failing to provide evidence.

the presiding judge stated that the appellant’s concealment of the true condition of the vehicle involved in the case was sufficient to cause the appellant to make a purchase decision against his true intention without knowing the true condition of the vehicle, and the appellant’s behavior constituted fraud.

regarding whether the purchase price should be returned and triple compensation should be paid, the presiding judge analyzed that the vehicle involved in the case was a major water-damaged vehicle and obviously did not meet the required safety operation quality standards, especially whether the respondent had a personal safety accident during use. the evidence submitted by the respondent was sufficient to prove that the vehicle involved in the case did not meet the required quality standards. therefore, the appellant should return the purchase price.

at the same time, the appellant's fraudulent behavior not only violated the principle of good faith and disrupted the operating order of the used car market, but also put consumers' personal safety in danger, seriously deviating from the core socialist values. although the vehicle involved in the case has been in use for 7 years, it cannot be used to deny the appellant's dishonest behavior as an operator. in order to promote the honest and trustworthy operation of operators and protect the legitimate rights and interests of consumers, the first instance court determined that the appellant's triple compensation to the respondent was not improper in accordance with the consumer rights protection law.

author: zhang guoqiang and han yu, all-media reporters of legal daily