OMVIC Warranties and Vehicle Condition Representations Flashcards

Under OMVIC regulations, dealers MUST disclose that a vehicle was previously used as which of the following?

Answer: A former police, taxi, or emergency vehicle

OMVIC requires dealers to disclose prior use as a police, taxi, emergency, or other specialized service vehicle, as buyers would consider this information material to their purchasing decision.

When a buyer tells a dealer they specifically need a vehicle for towing a 5,000 lb trailer and relies on the dealer's recommendation, which implied condition may arise under the Sale of Goods Act?

Answer: Implied condition of fitness for a particular purpose

Under the Sale of Goods Act, an implied condition of fitness for a particular purpose arises when the buyer makes their specific purpose known and relies on the dealer's skill and judgment in selecting a suitable vehicle.

A vehicle is sold 'as-is' with a signed buyer acknowledgment. Two weeks later, the buyer discovers the engine has a defect the dealer knew about but never disclosed. What is most likely TRUE?

Answer: The dealer may still be liable for failing to disclose a known material defect

An as-is clause does not shield a dealer from liability when they knew about a material defect and failed to disclose it — concealment of known defects can constitute fraudulent misrepresentation.

What is the primary distinction between 'innocent misrepresentation' and 'fraudulent misrepresentation'?

Answer: With innocent misrepresentation the speaker believed the statement was true; with fraudulent, they knew it was false

The critical distinction is the speaker's state of mind: innocent misrepresentation occurs when the speaker genuinely believed the false statement was true, while fraudulent misrepresentation involves knowingly making a false statement to deceive.

A dealer states that a high-mileage vehicle 'has at least another 100,000 km in it.' This statement is best characterized as:

Answer: Puffery or a non-binding opinion that is unlikely to create legal liability

A dealer's general opinion about a vehicle's remaining useful life is typically characterized as puffery or opinion rather than a factual statement or warranty, and is unlikely to create enforceable legal obligations.

Under OMVIC's Code of Ethics, if a registrant discovers after signing a sales contract that they failed to disclose a material defect, they should:

Answer: Immediately inform the buyer and attempt to resolve the situation

OMVIC's Code of Ethics requires registrants to act with integrity; discovering an undisclosed material defect after signing obligates the registrant to promptly inform the buyer and work toward a fair resolution.

The legal remedy of 'rescission' in a vehicle sale contract means:

Answer: Both parties return to their pre-contract positions — the vehicle is returned and the purchase price is refunded

Rescission restores both parties to their pre-contractual positions by unwinding the transaction — the buyer returns the vehicle and the dealer refunds the purchase price.