Private car sale: purchase contract & disclaimer

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Over the price negotiations it is often forgotten that for the correct completion of a car sale from private to private some basic things should be considered. For the seller it is important to secure the deal with a watertight car purchase contract.

Standard contracts are available on the Internet as a pre-printed form. Often, however, it is also worthwhile to include individual agreements in the car purchase contract. As a rule, we are talking about vehicles that have already been on the road for a few years. Often the car has already covered thousands of kilometers, often it has been involved in an accident in the past. Here it is necessary to consider a few things, because especially with the private car sale it has been shown in the past that after the sale there can be difficulties with the buyer.

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Before the test drive: check the identity of the buyer

The first impression of a potential buyer is important – but it is much more important what is behind it. Many car salesmen are already positively impressed by the customer when he shows great enthusiasm for the vehicle for sale or is ready to pay immediately with cash. In no case, however, should the seller of the car refrain from handing over the identity card or passport. On the one hand, this makes it easy to check whether the buyer is of legal age and thus also entitled to purchase the vehicle. If the customer wants a test drive, the ID should be given to the seller beforehand. Otherwise, the seller will quickly lose out in the event of theft or an accident.

When must defects in the vehicle be pointed out?

Topic in the car sale are also always defects in the vehicle, whether they are obvious or hidden. As a general guideline for the seller it can be stated that he does not have to point out defects of his own accord, especially if they are visible, for example scratches in the paint or minor dents. The situation is different if the buyer notices something during a test drive that could indicate a defect. Then the seller should also inform him about it, if it is a defect.

Exclusion of liability& Description of condition

The description of condition in the car purchase contract includes, above all, honestly stating whether the car has accident damage or known defects. You should mark which damages of it are already repaired or unrepaired. The description of all damages and defects should be as complete as possible.

Especially for vehicles with significant defects or old vehicles, sellers want to protect themselves and exclude liability for any undetected defects. But here caution is required when it comes to the wording of the exclusion of liability!

What happens if the buyer discovers a supposed defect after he has purchased the vehicle?

The courts in Germany have already dealt with the exclusion of liability in private car sales in countless proceedings. So, as a private seller of a vehicle, there are some important things to keep in mind when it comes to potential defects.

The legal basis for the sale of a vehicle from private to private is the normal law of sale, so the buyer and seller are consumers in the sense of § 13 BGB – in contrast to the sale of consumer goods, which is given when a private person buys a vehicle from a business (§ 474 BGB). According to general jurisprudence, a vehicle is defective if there is a deviation from the contractually agreed condition of the vehicle.Known defects should therefore be recorded in the purchase contract.

What the sales contract for private sellers should contain in any case is an exclusion of liability for material defects for defects unknown to the seller. It will then be very difficult for the buyer of the vehicle to prove afterwards that the seller knew about the defect. Because then he would already have to prove him to have acted fraudulently. In any case, defects resulting from wear and tear of parts of the vehicle due to its age are generally excluded from any liability.

Warranty cannot be completely excluded

The Federal Court of Justice (BGH) recently ruled that clauses in which the warranty is completely excluded are invalid. The reason given for this is that this complete exclusion also excludes liability for bodily injury and damage to health, which represents an unreasonable disadvantage to the buyer.

Forms and samples for vehicle purchase agreements that provide for such a regulation are therefore not legally valid!

The consequence is that if it is used, the whole disclaimer clause becomes invalid. This means that the seller is again liable for all damages and practically achieves the exact opposite of what was actually intended.

With the Smartlaw car purchase contract, such a basic exclusion is not possible. And even older car sales contracts created with Smartlaw are not affected by this ruling. So there is no need to worry for sellers who actively use our contract.

The vehicle purchase contract contains with warranty exclusion and limitation in each case the sentence that there is no exclusion in case of injury to life, body and health. Thus, liability is effectively excluded to the extent legally possible.

Inform motor vehicle liability insurance

Immediately after the sale of the vehicle the insurance company should be informed. Sales contracts usually have a section specifically for this purpose, which can be sent to the insurance company with the requested information. The registration office should also be informed that the vehicle has changed hands. This is important for the tax deregistration.

The notification that the vehicle has been sold must include the following information:

  • Name and address of the seller and the buyer,
  • the registration number of the vehicle,
  • a confirmation of the handing over of the registration certificates,
  • signatures of buyer and seller including date.

Immediately re-register the vehicle

As a private seller, you should also insist that the buyer immediately re-register the vehicle. You are also on the safe side if you have an assurance that the buyer is liable for any damage until the vehicle is re-registered. The buyer should be urged to briefly state the date on which the car was re-registered. If you do not hear from the buyer for a longer period than agreed, you should contact him.

Clarify payment modalities

Especially for smaller sums, sellers should insist on cash payment. Checks or accounts may not be covered for a variety of reasons, for example.

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