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over Salesperson’s Alleged Oral Misrep- late court affirmed the trial court’s dismiss-
resentations Failed Where Sales Contract al of the fraud and rescission claims.
Contained Merger Clause and “As-Is”
Provision: When a buyer bought a used It also affirmed dismissal of the FBPA
truck from a dealership, he asked the sales- and UCDA claims because those claims
person about the truck’s history. The sales- stemmed from the buyer’s allegations of
person allegedly stated that the truck was
“in good condition” and was “a good run- fraud through the alleged misrepresenta-
ning truck with no problems.” tions about the truck’s condition. However,
the appellate court concluded that the trial
PRE-LICENSE After the purchase, the truck leaked oil. court erred in granting judgment on the
CALENDAR The cost of the repairs allegedly exceeded pleadings on the revocation of acceptance
the truck’s value. The buyer revoked his claim, noting that although the sales con-
Saturday, July 25 acceptance of the truck, but the dealership tract contained an “as-is” provision, revoca-
9:45 am - 2:00 pm refused to honor the revocation. tion is an available remedy even where the
Monday, August 3 seller has attempted to limit its warranties
5:45 pm - 10:00 pm The buyer sued the dealership, alleging by using “as-is” language. See Villalobos v.
fraud, rescission of the contract, revocation
Monday, August 10 of acceptance, and violations of the Georgia Atlanta Motorsports Sales, LLC, 2020 Ga.
9:45 am - 2:00 pm Fair Business Practices Act and the Georgia App. LEXIS 306 (Ga. App. June 3, 2020).
Saturday, August 29 Used Car Dealer Act. Evidently the kitchen
9:45 am - 2:00 pm sink was otherwise occupied. COMPLIANCE TIP
Classes held at The trial court granted the dealership’s Note the language in the Villalobos case
Wyndham Atlanta Galleria motion for judgment on the pleadings, dealing with the characterization of state-
Atlanta concluding that the merger clause and the ments of the dealer’s salesperson as “state-
“as-is” provision in the parties’ contract ments of opinion.” Statements by salesper-
FOR MORE DETAILS, VISIT: prevented the buyer from relying on any sons during the course of a sale can, under
georgiacardealerlicense.com oral representations that did not become certain circumstances, be treated as war-
part of the written contract. The buyer ap-
pealed the trial court’s granting of the mo- ranties or product descriptions that can be
tion, and the Court of Appeals of Georgia binding on a dealership. Other statements
affirmed the trial court’s decision in part are treated as opinions – sometimes courts
Are you a GIADA and reversed it in part. will call such statements “mere puffery.”
member that has a Do your salespeople know where the line
dealer testimony or The appellate court found that the parties’ is that separates puffery from liability for
sales contract contained a merger clause your dealership? Do you train them so that
story you'd like to share that explicitly noted that the buyer “is not they know there is such a line? Perhaps it’s
with other Georgia relying on any representation that is not time to rework that sales training manual.
contained in this Agreement.” In addition,
dealers? Contact us! Our the contract contained an unequivocal
publications team would disclaimer stating that the buyer was pur- Wait. You don’t have a sales training man-
ual? We need to talk. n
love to share content chasing the truck “as is” with no warranty
and a statement that the dealership “here-
provided by dealers, by expressly disclaims all warranties, either Nikki (nmunro@hudco.com) is a Partner in
for dealers. Email express or implied, including any implied the law firm of Hudson Cook, LLP, Editor in
publications@giada.org warranties of merchantability or fitness for Chief of CounselorLibrary.com’s CARLAW®,
a particular purpose.”
a contributing author to the F&I Legal Desk
Book and a frequent writer for Spot Deliv-
The appellate court also noted that the buy- ery®, a monthly legal newsletter for auto deal-
er did not allege he was prevented from ers. Tom (thudson@hudco.com) is Of Coun-
reading the contract through fraud or sel to the firm, has written several books and
otherwise. The appellate court concluded is a frequent writer for Spot Delivery®. He
that the buyer could not justifiably rely on
the alleged oral misrepresentations by the is the Senior Editor of CARLAW®. For in-
salesperson that contradicted the contract formation, visit www.counselorlibrary.com.
terms, noting that the salesperson’s repre- ©CounselorLibrary.com 2020, all rights re-
sentations were statements of opinion not served. Single publication rights only, to the
actionable as fraud. Therefore, the appel- Association. HC/4817-4090-1057.1
GIADA Independent Auto Dealer JUL/AUG 2020 | 37
