## Facts

- A buyer purchased a used Volkswagen from an automobile dealer.
- The dealer’s sales personnel represented the car as a “good” vehicle in good condition for ordinary driving.
- After the sale, the buyer learned the car had previously been seriously wrecked, structurally damaged, and rebuilt.
- The buyer experienced problems and contended the vehicle’s market value was materially less than a comparable used car that had not been wrecked.
- The buyer presented evidence, including opinion testimony, of the difference in value between the car as represented and the car as actually delivered, and also referenced repair-related losses.
- Evidence permitted an inference that the dealer knew or should have known of the prior wreck and rebuilding but did not disclose it.

## Issues

1. Whether the dealer’s affirmative assurances and nondisclosure of the car’s prior wreck and rebuilding supported liability for fraudulent or actionable misrepresentation.
2. Whether selling a rebuilt wreck as an ordinary used car breached the implied warranty of merchantability (and related warranties) in a dealer sale.
3. Whether the buyer proved damages with sufficient certainty, including diminished-value damages measured by the difference between represented value and actual value.

## Decision

- The appellate court reversed the judgment for the dealer and remanded for further proceedings.
- The court held the evidence could support liability based on misrepresentation and breach of the implied warranty of merchantability.
- The court held the buyer presented competent evidence of damages under the difference-in-value measure, sufficient to permit recovery rather than judgment for the dealer.

## Legal Principles

- A dealer selling automobiles is a merchant and, absent an effective disclaimer, provides an implied warranty of merchantability that a used car is fit for ordinary driving purposes and of fair average quality within its description.
- A seller’s nondisclosure of a material adverse fact, when coupled with affirmative assurances of sound condition and superior access to the truth, can support liability for misrepresentation where the buyer reasonably relies.
- In misrepresentation and warranty actions involving goods, damages may be measured by the difference between the value as represented and the value as delivered, supported by market-value and opinion testimony; exact precision is not required if proof is reasonably certain.

## Conclusion

The court held that a used-car dealer may be liable for misrepresentation and breach of implied warranty when it sells a previously wrecked and rebuilt vehicle as an ordinary sound used car without disclosure, and that diminished-value damages may be proven through evidence of the difference between represented and actual market value.


O’Keefe v. Lee Calan Imports, Inc., 262 N.E.2d 758 (Ill. App. Ct. 1970)