When can I Cancel My Agreement to Purchase the Car In a Lawsuit?

When can I cancel my contract as a remedy in a lawsuit? (cars – boats – planes – whatever).

One of the things that were addressed previously about canceling contracts is the right to cancellation as a remedy lawsuit. If you remember there's a difference between the right to cancel contract as a term of the contract and the right to the remedy cancellation. These are two separate issues. What is being addressed here is when that right or remedy of cancellation or rescission is available to someone who has purchased the vehicle and has a lawsuit.

The first thing that needs to be understood is what type of facts will give an aggrieved consumer the right to cancel contract under New Jersey Law?

If there is either an express or implied warranty which is breached New Jersey law provides the right to cancellation. This is relatively straightforward. The Uniform Commercial Code as adopted by the state of New Jersey provides those who purchased goods such as cars the remedy of cancellation or rescission under certain circumstances when the warranty – express or implied - is breached.

The same is true of federal law for those in New Jersey. The Magnuson Moss Warranty Act provides consumer the right to cancel the contract or even rescind the contract between a breach of warranty covered by the Magnuson Moss Warranty Act. In my opinion, an example of a breach of the warranty which would warrant a repurchase would be an odometer rollback or defective odometer that cannot be repaired. This is but one example for breach of warranty.

If you prove a cause of action for fraud or consumer fraud you have the right to cancel contract. The claims for consumer fraud include various facts including but not limited to material omissions of fact and/or an affirmative misrepresentation of fact. Fraud is very similar but has a higher standard of proof. What this means is that you have to prove fraud by clear and convincing evidence but only need to prove consumer fraud by a preponderance of the evidence. I do not want to get into a long explanation but it is easier to prove consumer fraud and fraud and we will leave it at that. Nonetheless, if you prove one of these causes of action you have the right to cancel the contract.

Remember sometimes the right to cancellation or rescission is not one that would be a good result. One of the reasons for this is that under these concepts of recovery you have to pay for use.

Now I have to be honest this is one of the biggest complaints from my clients is the following:

I do not want to have to pay for use of the car because.

I was happy with the car.

I do not want to pay for use of the car because I was ripped off when it was sold to me.

These are both very good and very compelling arguments that the selling dealer for the manufacturer should not be entitled to use credit. You have to understand that if you have driven the vehicle for a long period of time you might have to pay for that use.

As an example if you have driven a car for 200,000 miles if you have to pay for use what are you actually going to be back after the deal is rescinded. Under the law a seller of merchandise, or other, might be entitled to a credit for your use. I have made some tough arguments against the defendant getting a credit for use. The arguments I make have not been accepted by any case law however I assert that the credit for use as an equitable credit and since the selling party for consumer fraud credit in fairness.