The case centred around a second-hand vehicle sold to the applicant and falsely described as “accident-free” with a “full-service record.” Upon discovering that the vehicle had extensive latent defects and had been involved in a prior collision, the purchaser sought to cancel the sale and reclaim his payment on the grounds of misrepresentation.
In making its finding, the Court considered the difference between a latent defect and a misrepresentation on the part of the seller. The Court clarified that a latent defect is a hidden flaw not easily observable during an inspection, and which impairs the utility of the item for its intended purpose.
A seller is typically shielded from liability under a ‘voetstoots’ clause unless they knew of the defect and deliberately withheld the information or acted fraudulently. A misrepresentation, on the other hand, is when a seller falsely represents that goods are free of defects or intentionally conceals critical flaws to get the buyer to make the purchase. In such an event, the buyer may be able to rely on this misrepresentation to cancel the sale.
The Court accordingly found in favour of the purchaser, noting that the representation that the vehicle was accident-free was material, false, and intended to induce the purchaser and that the seller had knowingly misrepresented the condition of the vehicle. The Court ordered that the purchaser was entitled to cancel the oral contract of sale and claim restitution based upon the misrepresentation.
The takeaway from this case is that a ‘voetstoots’ clause cannot be used as a shield for fraudulent behaviour and that honesty is critical when selling goods, particularly as concealing known defects or providing false information not only undermines the trust in commerce but can expose you to legal consequences.
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