v. Beijing Heli Huatong Automobile Service Co., Ltd., A Sale and ...€¦ · ZHANG Li completed the...
Transcript of v. Beijing Heli Huatong Automobile Service Co., Ltd., A Sale and ...€¦ · ZHANG Li completed the...
Copyright 2014 by Stanford University
ZHANG Li
v.
Beijing Heli Huatong Automobile Service Co., Ltd.,
A Sale and Purchase Contract Dispute
Guiding Case No. 17
(Discussed and Passed by the Adjudication Committee of the Supreme People’s Court
Released on November 8, 2013)
CHINA GUIDING CASES PROJECT
English Guiding Case (EGC17)
February 4, 2014 Edition*
* The citation of this translation of the Guiding Case is: 《张莉诉北京合力华通汽车服务有限公司买卖合
同纠纷案》(ZHANG Li v. Beijing Heli Huatong Automobile Service Co., Ltd., A Sale and Purchase Contract
Dispute), CHINA GUIDING CASES PROJECT, English Guiding Case (EGC17), Feb. 4, 2014 Edition, available at
http://cgc.law.stanford.edu/guiding-cases/guiding-case-17.
This document was primarily prepared by JIANG Runzhou, LIANG Lili, Lisa Lin, Michael Schmale, and
SUN Yayuan. The document was finalized by Alyssa King, Jordan Corrente Beck, Dimitri Phillips, and Dr. Mei
Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and
boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the
piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and
reflects formatting of the Chinese document released by the Supreme People’s Court.
The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme
People’s Court of the People’s Republic of China and was released on November 8, 2013, available at
http://www.chinacourt.org/article/detail/2013/11/id/1150419.shtml. See also 最高人民法院关于发布第五批指导
性案例的通知 (The Supreme People’s Court’s Notice Concerning the Release of the Fifth Batch of Guiding Cases),
Nov. 8, 2013, available at http://www.chinacourt.org/law/detail/2013/11/id/147238.shtml.
2014.02.04 Edition
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Keywords
Civil Sale and Purchase Contract Fraud Family Car
Main Points of the Adjudication
1. Where cars are purchased [to meet] consumption needs in family life, fraud disputes
occurring in [these purchases] may be handled pursuant to the Law of the People’s Republic of
China on Protection of Consumer Rights and Interests.
2. [If] a car seller promises to sell a new car that has not been used or repaired to a
consumer, [but] after purchase, the consumer discovers that the car has been used or repaired,
[and] the seller cannot prove that he1 has performed his duty of disclosure and that [the
performance] has been acknowledged by the consumer, [this] constitutes sales fraud. [If] the
consumer demands that the seller compensate his losses in accordance with the Law on
Protection of Consumer Rights and Interests, the people’s court should offer support.
Related Legal Rule(s)
Article 2 and Article 55, Paragraph 1 of the Law of the People’s Republic of China on
Protection of Consumer Rights and Interests ([Article 55, Paragraph 1] was revised on October
25, 2013 and was Article 49 before the revision)
Basic Facts of the Case
On February 28, 2007, plaintiff ZHANG Li (张莉) purchased a Shanghai General Motors
Chevrolet Epica sedan from defendant Beijing Heli Huatong Automobile Service Co., Ltd. (北京
合力华通汽车服务有限公司) (hereinafter referred to as “Heli Huatong Company”) at the price
of RMB 138,000. The two parties signed an Automobile Sales Contract. Article 7 of the
contract stipulated:
. . . The seller guarantees that the vehicle purchased by the buyer is a new car that
has gone through necessary inspection and cleaning before delivery, [that] the
vehicle odometer reads 18 kilometers, [and that the vehicle] conforms with all the
specifications and indicators listed in those documents that the seller provided to
1 Translators’ note: “he” and “his” as used herein are, unless the context indicates otherwise, gender-neutral
terms that also refer to “she”, “her”, and “it”.
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the buyer and that were delivered with the car . . .
On the day the contract was signed, ZHANG Li paid Heli Huatong Company the vehicle
purchase price of RMB 138,000, [and] at the same time paid the vehicle purchase tax of RMB
12,400, a one-package service fee2 of RMB 500, and an insurance premium of RMB 6,060. On
the same day, Heli Huatong Company delivered a Chevrolet Epica sedan to ZHANG Li, [and]
ZHANG Li completed the motor vehicle registration procedure for the car. On May 13, 2007,
when ZHANG Li sent the vehicle to Heli Huatong Company for maintenance, [she] discovered
that the car had undergone repairs on January 17, 2007.
In the course of handling [the case], Heli Huatong Company stated that the vehicle
purchased by ZHANG Li indeed had accrued scratches in transit [and] had undergone repairs on
January 17, 2007. The repair items included spray painting the right front fender, spray painting
the right front door, spray painting the right rear fender, sheet metal processing of the right front
door, sheet metal processing of the right rear fender, and sheet metal processing of the right front
fender. During the repair, the side sill clips, fuel tank door, and front fender lamp assembly3
were replaced. The person who sent [the vehicle] for repair was an employee of [Heli Huatong
Company]. Heli Huatong Company stated that, as for the matter of the vehicle having once
undergone repairs, [the company had] clearly informed ZHANG Li during the sale and also, in
accordance with this [fact], offered a relatively large discount. The sales price of the vehicle
should have been RMB 151,900. After negotiations, the actual sales price of the vehicle was
RMB 138,000, and some decorations were offered for free. To prove the aforementioned facts,
Heli Huatong Company provided vehicle maintenance records and a vehicle delivery checklist
with ZHANG Li’s signature dated February 28, 2007. In the remarks column of the vehicle
delivery checklist, there was written:
The car has been 1/4 refueled. The right side of the car had sheet metal and spray
paint repairs [and the car] is sold at the agreed price.
Heli Huatong Company expressed that the delivery checklist was kept by the company, [and
that] ZHANG Li did not have this checklist in her hands.4 With regard to the aforementioned
two pieces of evidence provided by Heli Huatong Company, ZHANG Li stated [that she] did not
have objections to the vehicle maintenance records, [and confirmed that] the signature on the
vehicle delivery checklist was indeed her signature. However, [she claimed that] during the sale,
Heli Huatong Company failed to inform [her] that the vehicle had undergone repairs, [and that]
when she signed [the checklist], the remarks column did not have the words, “The right side of
the car had sheet metal and spray paint repairs [and the car] is sold at the agreed price.”
2 Translators’ note: the term “一条龙服务费” translated here as “one-package service fee” suggests that the
fee covers a series of services the details of which are not clear from the original text. 3 Translators’ note: the term “板灯总成” translated here as “lamp assembly” refers to the entire headlamp or
taillight unit of a car, as opposed to just the bulb, the reflector, or the covering. 4 Translators’ note: while the phrase “手中” literally translates to “in [her] hands”, here it likely means “in
[her] possession”.
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Results of the Adjudication
In October 2007, the Chaoyang District People’s Court of Beijing Municipality rendered
the (2007) Chao Min Chu Zi No. 18230 Civil Judgment:
1. [The court] rescinds the Automobile Sales Contract signed by ZHANG Li and Heli
Huatong Company on February 28, 2007.
2. [The court orders] ZHANG Li to return her purchased Chevrolet Epica sedan to Heli
Huatong Company within seven days after the judgment comes into effect.
3. [The court orders] Heli Huatong Company to return the vehicle purchase amount of
one hundred and twenty-four thousand and two hundred yuan to ZHANG Li within seven
days after the judgment comes into effect.
4. [The court orders] Heli Huatong Company to compensate ZHANG Li the purchase tax
of twelve thousand and four hundred yuan, the service fee of five hundred yuan, and the
insurance premium of six thousand and sixty yuan within seven days after the judgment
comes into effect.
5. [The court orders] Heli Huatong Company to pay ZHANG Li a compensation that
doubles the vehicle purchase amount, which is one hundred and thirty-eight thousand
yuan, within seven days after the judgment comes into effect.
6. [The court] rejects ZHANG Li’s other litigation claims.
After the judgment was pronounced, Heli Huatong Company appealed. On March 13, 2008, the
No. 2 Intermediate People’s Court of Beijing Municipality rendered the (2008) Er Zhong Min
Zhong Zi No. 00453 Civil Judgment: [the court] rejects the appeal and upholds the original
judgment.
Reasons for the Adjudication
In the effective judgment, the court opined:5 plaintiff ZHANG Li purchased the car for
personal use [to meet] the needs of [daily] life. Defendant Heli Huatong Company did not have
evidence to prove that ZHANG Li purchased the car for business operation or other consumption
unrelated to the needs of [daily] life. Thus, ZHANG Li’s act of purchasing the car was a type of
consumption necessary to [daily] life, [and] the Law of the People’s Republic of China on
Protection of Consumer Rights and Interests should apply.
5 Translators’ note: the Chinese text does not specify which court opined. Given the context, this should be
the No. 2 Intermediate People’s Court of Beijing Municipality.
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In accordance with the stipulations in the Automobile Sales Contract signed by both
parties, the vehicle delivered to ZHANG Li by Heli Huatong Company should be a new car
without maintenance records, [but] the vehicle sold had in fact undergone repairs before delivery.
These were the facts that both parties acknowledged, [and] thus the focus of this dispute was
whether or not Heli Huatong Company had performed its duty of disclosure beforehand.
Lowering sales prices of vehicles or [offering] discounts and providing complimentary
decorations were sales strategies commonly used by sellers. [Both were done here] as the result
of the parties’ negotiations. [Nonetheless, one] could not infer from [this alone] that Heli
Huatong Company had lowered the price and [offered] discounts on the basis of informing
ZHANG Li that the car had defects. [As for] the vehicle delivery checklist with ZHANG Li’s
signature submitted by Heli Huatong Company, because it was kept solely by Heli Huatong
Company and [because] the [pertinent] contents in the remarks column were written by different
personnel of the company and [that the pertinent contents] were not recognized by ZHANG Li,
the delivery checklist was not sufficient to prove that ZHANG Li was aware that the vehicle had
undergone repairs before. Thus, Heli Huatong Company’s defense, claiming that it had
performed its duty of informing ZHANG Li of the [car’s] defects, was not accepted. [It] should,
therefore, be determined that Heli Huatong Company concealed the preexisting defects of the
vehicle when it was sold [and that] there was a fraudulent act. [Thus,] the car and vehicle
purchase amount should be returned and compensation for ZHANG Li’s losses should be added
[to the amount to be paid by the seller].