CASE STUDY: KWIKSELL CARS LTD

John Perry spent 1,500 on a second-hand car bought from Roy Clarke, the salesperson at Kwiksell Cars. He is regretting his decision. Perry had never purchased a car before but believed that he was smart enough to tell a good car from a bad one. After several weekends of trying to buy a vehicle from private sellers, he decided that going to a dealer was the only sensible option left to him if he wanted to buy one quickly.

A four-year-old Astrada 1100 in the forecourt of Kwiksell Cars had caught his eye as he traveled to work by bus. It was advertised at 1,800 and looked in good condition.

When Perry and his girlfriend visited Kwiksell Cars the following Saturday, he was greeted by Roy Clarke, who asked him which car he was interested in and took him to see the Astrada. Clarke described the vehicle as 'in lovely condition,' the mechanics having been overhauled recently, and the engine tuned. Perry was concerned about petrol consumption and was told that he could expect around 40 mpg around town, increasing to nearly 55 mpg on long runs. Perry was very impressed, but he was a little worried about the car's capacity to pull his father's caravan. 'There's no problem there,' said Clarke. 'The Astrada might have a small engine, but the carburetor has been souped-up, and it will cope with a caravan. No problem!'

Clarke asked Perry if he and his young lady would like a test drive. Perry agreed and found the car quite good on acceleration, although the engine was a bit noisier than his father's car. 'That's the souped-up engine,' said Clarke. 'It makes it sound a bit racy, doesn't it?'

To Perry, the car looked like the solution to his long search, but he knew that, as a cash purchaser, he might be able to negotiate a lower price.

'The car seems to suit my purposes, but the price is a little higher than I would be prepared to pay.' 'Yes, but it's not often a car in this condition comes onto the market, sir,' retorted Clarke. 'What would you be prepared to knock off the price for a cash deal?' asked Perry.

'Usually, the maximum I am allowed to go is 200, but if you are prepared to pay a deposit now, with the remainder on, say, Tuesday when you collect the car, I'm willing to reduce the price to 1,500.'

Perry felt pleased with himself, and in front of his girlfriend too! He agreed. He wrote a cheque for 500 and decided to bring the balance in cash on the following Tuesday. Clarke asked him to sign a contract of sale and promised that the car and all the necessary documents would be ready by Tuesday.

Perry was pleased with his new purchase at first, but the following weekend, in the long run, he noticed a knocking noise coming from the engine. The car also appeared to be consuming much more petrol than he expected. He decided to buy a car guide from WH Smith and check the petrol consumption figures. The manual stated that the Astrada would achieve 30 mpg on the urban cycle and 40 mpg at a steady 56 mph. Perry was livid!

The knocking noise was still to be heard, so he took the car to his father's garage. The mechanic told Perry that the car's big end was badly worn. It would cost 300 to be repaired. 'The engine's not souped-up,' he said, 'it's kaput!'

'But I need a car next weekend. I'm going on holiday to my father's caravan,' said Perry.

'Well, I hope you're thinking of using your father's car,' said the mechanic. 'You'd blow the engine for sure with a car like the Astrada. It's only got an 1100 engine.'

Perry stormed into Clarke's office.

'I'm sorry you've had these problems, but engine troubles are common with Astradas,' explained Clarke. 'I'd like to help, but I did take you for a test drive.'

'You conned me!' shouted Perry.

'Not at all. You will see that the contract you signed states that the responsibility to check for defects was the buyers. That means that any faults which appear after-sale are your responsibility to put right. You told me you knew a bit about cars. If you didn't, you should have brought a mechanic with you. I knocked 300 off the price. That was to cover for any problems like this.'

CASE DISCUSSION QUESTIONS

General Instruction: All questions will be answered based on the case study.

1.Did Clarke break the law regarding the sale of the car? If not, explain.

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2.Which laws are relevant to this case? How can it apply to this case?

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3.Discuss the ethical practice in this case.

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